SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (No. 2-25235)
UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 46 [x]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT [x]
COMPANY ACT OF 1940
Amendment No. [ ]
Fidelity Contrafund
(Exact Name of Registrant as Specified in Charter)
82 Devonshire Street
Boston, MA 02109
(Address Of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (617) 570-7000
Arthur S. Loring, Esq.
82 Devonshire Street
Boston, MA 02109
(Name and Address of Agent for Service)
It is proposed that this filing become effective:
[ ] Immediately upon filing pursuant to paragraph (b) of Rule 485
[x] On (February 19, 1994) pursuant to paragraph (b) of Rule 485
[ ] 60 days after filing pursuant to paragraph (a) of Rule 485
[ ] On ( ) pursuant to paragraph (a) of Rule 485
Registrant has filed a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940 and intends to file the notice required by
such Rule before February 28, 1994.
FIDELITY CONTRAFUND
CROSS REFERENCE SHEET
FORM N-1A
ITEM NUMBER PROSPECTUS SECTION
<TABLE>
<CAPTION>
<S> <C>
1................................... Cover Page
...
2 Expenses
a...................................
b, Contents; The Fund at a Glance; Who May Want to
c............................. Invest
3 Financial Highlights
a...................................
*
b..................................
Performance
c..................................
4a Charter
(i)..............................
(ii)............................. The Fund at a Glance; Investment Principles;
Securities & Investment Practices, Fundamental
Investment Policies and Restrictions
b................................ Securities & Investment Practices
Who May Want to Invest; Investment Principles;
c.................................... Securities & Investment Practices
5 Charter
a...................................
b(i)........................... Doing Business with Fidelity; Charter
(ii).............................. Charter
(iii)........................... Expenses; Breakdown of Expenses
c, Charter; FMR and Its Affiliates; Breakdown of
d............................... Expenses, Cover Page
FMR and Its Affiliates
e...................................
Expenses
f...................................
FMR and its Affiliates
g(i)...............................
*
(ii)...............................
5A................................. Performance
6 a Charter
(i)..............................
How to Buy Shares; How to Sell Shares; Transaction
(ii)............................... Details; Exchange Restrictions
*
(iii)..............................
*
b.................................
Exchange Restrictions
c..................................
*
d...................................
Doing Business with Fidelity; How to Buy Shares;
e.................................. How to Sell Shares; Investor Services
Dividends, Capital Gains, and Taxes
f,g................................
7 Cover Page; Charter
a...................................
How to Buy Shares; Transaction Details
b...................................
*
c..................................
How to Buy Shares
d...................................
e................................ *
f................................ *
8................................... How to Sell Shares; Investor Services; Transaction
... Details; Exchange Restrictions
9................................... *
...
</TABLE>
* Not Applicable
FIDELITY CONTRAFUND
CROSS REFERENCE SHEET
(continued)
FORM N-1A
ITEM NUMBER STATEMENT OF ADDITIONAL INFORMATION SECTION
<TABLE>
<CAPTION>
<S> <C>
10, 11.......................... Cover Page
12.................................. *
..
13a - Investment Policies and Limitations
c............................
*
d..................................
14a - Trustees and Officers
c............................
15a, *
b..............................
c.................................. Trustees and Officers
16a FMR, Portfolio Transactions
i................................
ii.............................. Trustees and Officers
iii............................. Management Contract
Management Contract
b.................................
c, d............................. Contracts with Companies Affiliated with FMR
e,f,g........................... *
Description of the Fund
h.................................
i................................. Contracts with Companies Affiliated with FMR
17a - Portfolio Transactions
c............................
d,e.............................. *
18a................................ Description of the Fund
..
*
b.................................
19a................................ Additional Purchase and Redemption Information
..
Additional Purchase and Redemption Information;
b.................................. Valuation of Portfolio Securities
c.................................. *
20.................................. Distributions and Taxes
..
21a, Contracts with Companies Affiliated with FMR
b..............................
c................................. *
22.................................. Performance
..
23.................................. Financial Statements
..
</TABLE>
* Not Applicable
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how the fund
invests and the services available to shareholders.
A Statement of Additional Information dated February 19, 1994 has been
filed with the Securities and Exchange Commission, and is incorporated
herein by reference (is legally considered a part of this prospectus). The
Statement of Additional Information is available free upon request by
calling Fidelity at 1-800-544-8888.
Mutual fund shares are not deposits or obligations of, or endorsed or
guaranteed by, any bank, nor are they federally insured or otherwise
protected by the FDIC, the Federal Reserve Board, or any other agency.
Contrafund is a growth fund. It seeks to increase the value of your
investment over the long term by investing in securities of companies that
are undervalued or out-of-favor.
FIDELITY
CONTRAFUND
PROSPECTUS
FEBRUARY 19, 1994(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA
02109
LIKE ALL MUTUAL
FUNDS, THESE
SECURITIES HAVE NOT
BEEN APPROVED OR
DISAPPROVED BY THE
SECURITIES AND
EXCHANGE
COMMISSION OR ANY
STATE SECURITIES
COMMISSION, NOR HAS
THE SECURITIES AND
EXCHANGE
COMMISSION OR ANY
STATE SECURITIES
COMMISSION PASSED
UPON THE ACCURACY
OR ADEQUACY OF THIS
PROSPECTUS. ANY
REPRESENTATION TO
THE CONTRARY IS A
CRIMINAL OFFENSE.
CON-pro-294
CONTENTS
KEY FACTS THE FUND AT A GLANCE
WHO MAY WANT TO INVEST
EXPENSES AND PERFORMANCE EXPENSES The fund's sales
charge (load) and its yearly
operating expenses.
FINANCIAL HIGHLIGHTS A summary
of the fund's financial data.
PERFORMANCE How the fund has
done over time.
YOUR ACCOUNT DOING BUSINESS WITH FIDELITY
TYPES OF ACCOUNTS Different
ways to set up your account,
including tax-sheltered retirement
plans.
HOW TO BUY SHARES Opening an
account and making additional
investments.
HOW TO SELL SHARES Taking money
out and closing your account.
INVESTOR SERVICES Services to
help you manage your account.
DIVIDENDS, CAPITAL GAINS, AND
TAXES
SHAREHOLDER AND TRANSACTION DETAILS Share price
ACCOUNT POLICIES calculations and the timing of
purchases and redemptions.
EXCHANGE RESTRICTIONS
SALES CHARGE REDUCTIONS AND
WAIVERS
THE FUND IN DETAIL CHARTER How the fund is
organized.
BREAKDOWN OF EXPENSES How
operating costs are calculated and
what they include.
25 INVESTMENT PRINCIPLES The fund's
overall approach to investing.
SECURITIES AND INVESTMENT
PRACTICES
KEY FACTS
THE FUND AT A GLANCE
GOAL: Capital appreciation (increase in the value of the fund's shares). As
with any mutual fund, there is no assurance that the fund will achieve its
goal.
STRATEGY: Invests mainly in equity securities of companies that are
undervalued or out-of-favor.
MANAGEMENT: Fidelity Management & Research Company (FMR) is the
management arm of Fidelity Investments, which was established in 1946 and
is now America's largest mutual fund manager.
SIZE: As of December 31, 1993, the fund had over $ 6.2 billion in net
assets.
WHO MAY WANT TO INVEST
The fund may be appropriate for investors who are willing to ride out stock
market fluctuations in pursuit of potentially high long-term returns. The
fund is designed for those who are looking for an investment approach that
follows a contrarian philosophy. This approach focuses on companies that
are currently out of public favor but show potential for capital
appreciation. The fund does not pursue income, and is not in itself a
balanced investment plan.
Over time, stocks have shown greater growth potential than other types of
securities. In the short-term, however, stock prices can fluctuate
dramatically in response to company, market, or economic news. When you
sell your fund shares, they may be worth more or less than what you paid
for them.
THE SPECTRUM OF
FIDELITY FUNDS
Broad categories of Fidelity
funds are presented here in
order of ascending risk.
Generally, investors seeking
to maximize return must
assume greater risk.
Contrafund is in the GROWTH
category.
(bullet) MONEY MARKET Seeks
income and stability by
investing in high-quality,
short-term investments.
(bullet) INCOME Seeks income by
investing in bonds.
(bullet) GROWTH AND INCOME
Seeks long-term growth and
income by investing in stocks
and bonds.
(arrow) GROWTH Seeks long-term
growth by investing mainly in
stocks.
(checkmark)
EXPENSES AND PERFORMANCE
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy or sell
shares of a fund. See pages and - for an explanation of how and when these
charges apply. Lower sales charges may be available for accounts over
$250,000.
Maximum sales charge on purchases
(as a % of offering price) 3.00%
Maximum sales charge on
reinvested dividends None
Deferred sales charge on redemptions None
Exchange fee None
ANNUAL FUND OPERATING EXPENSES are paid out of the fund's assets. The fund
pays a management fee that varies based on its performance. It also incurs
other expenses for services such as maintaining shareholder records and
furnishing shareholder statements and fund reports. The fund's expenses are
factored into its share price or dividends and are not charged directly to
shareholder accounts (see page ).
The following are projections based on historical expenses, and are
calculated as a percentage of average net assets. A portion of the
brokerage commissions that the fund paid was used to reduce fund
expenses. Without this reduction, the total fund operating expenses would
have been 1.08 %.
Management fee .69 %
12b-1 fee None
Other expenses .37 %
Total fund operating expenses 1.06 %
EXAMPLES: Let's say, hypothetically, that the fund's annual return is 5%
and that its operating expenses are exactly as just described. For every
$1,000 you invested, here's how much you would pay in total expenses if you
close your account after the number of years indicated:
After 1 year $ 40
After 3 years $ 63
After 5 years $ 87
After 10 years $ 156
These examples illustrate the effect of expenses, but are not meant to
suggest actual or expected costs or returns, all of which may vary.
UNDERSTANDING
EXPENSES
Operating a mutual fund
involves a variety of
expenses for portfolio
management, shareholder
statements, tax reporting, and
other services. As an
investor, you pay some of
these costs directly (for
example, the fund's 3% sales
charge). Others are paid from
the fund's assets; the effect
of these other expenses is
already factored into any
quoted share price or return.
(checkmark)
FINANCIAL HIGHLIGHTS
The table that follows has been audited by Coopers & Lybrand,
independent accountants. Their unqualified report is included in the fund's
Annual Report. The Annual Report is incorporated by reference into (is
legally a part of) the Statement of Additional Information.
SELECTED PER-SHARE DATA
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Year ended 1984 1985 1986 1987 1988 1989 1990 1991 1992C 1993
December 31
Net asset value, $ 12.7 $ 9.77 $ 12.1 $ 11.2 $ 10.7 $ 12.6 $ 16.7 $ 17.3 $ 25.6 $ 27.4
beginning of period 3 6 9 2 5 8 5 0 7
Income from
Investment
Operations
Net investment .27 .43 .05 .17 .36 .63E .51 .22 .32D (.09)
income
Net realized and (1.25) 2.21 1.48 (.31) 1.89 4.82 .15 9.20 3.67 5.89
unrealized
gain (loss) on
investments
Total from (.98) 2.64 1.53 (.14) 2.25 5.45 .66 9.42 3.99 5.80
investment
operations
Less Distributions
From net (.29) (.25) (.25) -- (.32) (.25) (.09) (.11) (.20) (.11)
investment
income
In excess of net -- -- -- -- -- -- -- -- -- (.07)
investment
income
From net realized (1.69) -- (2.15) (.43) -- (1.07) -- (1.06) (1.92) (2.25)
gain
Total distributions (1.98) (.25) (2.40) (.43) (.32) (1.32) (.09) (1.17) (2.12) (2.43)
Net asset value, $ 9.77 $ 12.1 $ 11.2 $ 10.7 $ 12.6 $ 16.7 $ 17.3 $ 25.6 $ 27.4 $ 30.8
end of period 6 9 2 5 8 5 0 7 4
Total returnA,B (8.27) 27.06 13.32 (1.90) 21.02 43.15 3.94 54.92 15.89 21.43
% % % % % % % % % %
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of $ 81 $ 87 $ 84 $ 87 $ 106 $ 298 $ 332 $ 1,00 $ 1,98 $ 6,20
period (in millions)
0 6 8
Ratio of expenses .99% .95% .88% .92% .98% .95% 1.06 .89% .87% 1.06
to G % %F
average net assets
Ratio of expenses .99% .95% .88% .92% .98% .95% 1.06 .89% .87% 1.08
to average net G % %F
assets before
expense
reductions
Ratio of net 2.82 3.84 1.68 1.26 3.01 4.01 3.02 1.01 1.19 .46%
investment income % % % % % % % % %
to average net
assets
Portfolio turnover 234% 135% 190% 196% 250% 266% 320% 217% 297% 255%
rate
</TABLE>
A TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE.
B THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN.
C AS OF JANUARY 1, 1992 THE FUND DISCONTINUED THE USE OF EQUALIZATION
ACCOUNTING.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH AMOUNTED
TO $.20 PER SHARE.
F FMR HAS DIRECTED CERTAIN PORTFOLIO TRADES TO BROKERS WHO PAID A
PORTION OF THE FUND'S EXPENSES.
G INCLUDES REIMBURSEMENT OF $.01 PER SHARE FROM FIDELITY SERVICE COMPANY
FOR ADJUSTMENTS TO PRIOR PERIODS' FEES. IF THE REIMBURSEMENT HAD NOT
EXISTED, THE ANNUALIZED RATIO OF EXPENSES TO AVERAGE NET ASSETS WOULD HAVE
BEEN 1.01%.
PERFORMANCE
Mutual fund performance is commonly measured as TOTAL RETURN. The total
returns that follow are based on historical fund results and do not reflect
the effect of taxes.
The fund's fiscal year runs from January 1 through December 31. The tables
below show the fund's performance over past fiscal years compared to two
measures: investing in a broad selection of stocks (S&P 500) and
not investing at all (inflation, or CPI). To help you compare this fund to
other funds, the chart on page 7 displays calendar-year performance.
AVERAGE ANNUAL TOTAL RETURNS
Fiscal years ended Past 1 Past 5 Past 10
December 31, 1993 year years years
Contrafund 21.43% 26.53% 17.66%
Contrafund
(load adj.A) 17.78% 25.77% 17.30%
S&P 500 10.08% 14.55% 14.94%
Consumer Price
Index 2.75% 3.89% 3.71%
CUMULATIVE TOTAL RETURNS
Fiscal years ended Past 1 Past 5 Past 10
December 31, 1993 year years years
Contrafund 21.43% 224.37% 408.62%
Contrafund
(load adj.A) 17.78% 214.64% 393.36%
S&P 500 10.08% 97.26% 302.35%
Consumer Price
Index 2.75% 21.00% 43.93%
A LOAD-ADJUSTED RETURNS INCLUDE THE EFFECT OF PAYING THE FUND'S 3% SALES
CHARGE.
EXAMPLE: Let's say, hypothetically, that an investor put $10,000 in the
fund on December 31, 1983. From that date through December 31, 1993, the
fund's total return, including the effect of paying the 3% sales charge,
was 393.36 %. That $10,000 would have grown to $ 49,336 (the
initial investment plus 393.36 % of $10,000).
$10,000 OVER TEN YEARS
Fiscal years 1983 1988 1993
Row: 1, Col: 1, Value: 9700.01
Row: 2, Col: 1, Value: 9315.359999999999
Row: 3, Col: 1, Value: 8511.09
Row: 4, Col: 1, Value: 8484.58
Row: 5, Col: 1, Value: 8396.200000000001
Row: 6, Col: 1, Value: 7998.48
Row: 7, Col: 1, Value: 8122.21
Row: 8, Col: 1, Value: 7689.150000000001
Row: 9, Col: 1, Value: 8758.559999999999
Row: 10, Col: 1, Value: 8758.559999999999
Row: 11, Col: 1, Value: 8714.369999999999
Row: 12, Col: 1, Value: 8652.5
Row: 13, Col: 1, Value: 8897.59
Row: 14, Col: 1, Value: 9744.540000000001
Row: 15, Col: 1, Value: 9808.290000000001
Row: 16, Col: 1, Value: 9890.26
Row: 17, Col: 1, Value: 9780.969999999999
Row: 18, Col: 1, Value: 9972.220000000001
Row: 19, Col: 1, Value: 10035.97
Row: 20, Col: 1, Value: 10145.25
Row: 21, Col: 1, Value: 10336.5
Row: 22, Col: 1, Value: 9817.4
Row: 23, Col: 1, Value: 10345.61
Row: 24, Col: 1, Value: 10892.03
Row: 25, Col: 1, Value: 11305.65
Row: 26, Col: 1, Value: 11407.92
Row: 27, Col: 1, Value: 12529.4
Row: 28, Col: 1, Value: 13088.3
Row: 29, Col: 1, Value: 12844.41
Row: 30, Col: 1, Value: 13169.59
Row: 31, Col: 1, Value: 13108.62
Row: 32, Col: 1, Value: 12143.26
Row: 33, Col: 1, Value: 12935.87
Row: 34, Col: 1, Value: 12163.58
Row: 35, Col: 1, Value: 12976.52
Row: 36, Col: 1, Value: 12976.52
Row: 37, Col: 1, Value: 12811.28
Row: 38, Col: 1, Value: 14660.92
Row: 39, Col: 1, Value: 15557.31
Row: 40, Col: 1, Value: 15815.23
Row: 41, Col: 1, Value: 15850.4
Row: 42, Col: 1, Value: 15991.09
Row: 43, Col: 1, Value: 16577.27
Row: 44, Col: 1, Value: 17386.2
Row: 45, Col: 1, Value: 18019.28
Row: 46, Col: 1, Value: 17655.85
Row: 47, Col: 1, Value: 12556.05
Row: 48, Col: 1, Value: 11864.35
Row: 49, Col: 1, Value: 12567.77
Row: 50, Col: 1, Value: 13376.71
Row: 51, Col: 1, Value: 13986.34
Row: 52, Col: 1, Value: 14009.79
Row: 53, Col: 1, Value: 14291.15
Row: 54, Col: 1, Value: 14091.85
Row: 55, Col: 1, Value: 14771.82
Row: 56, Col: 1, Value: 14877.34
Row: 57, Col: 1, Value: 14549.07
Row: 58, Col: 1, Value: 15146.98
Row: 59, Col: 1, Value: 15545.59
Row: 60, Col: 1, Value: 15428.35
Row: 61, Col: 1, Value: 15209.8
Row: 62, Col: 1, Value: 16219.78
Row: 63, Col: 1, Value: 16123.59
Row: 64, Col: 1, Value: 16977.27
Row: 65, Col: 1, Value: 18071.41
Row: 66, Col: 1, Value: 19009.25
Row: 67, Col: 1, Value: 18889.01
Row: 68, Col: 1, Value: 20620.41
Row: 69, Col: 1, Value: 21209.56
Row: 70, Col: 1, Value: 21618.36
Row: 71, Col: 1, Value: 20969.09
Row: 72, Col: 1, Value: 21450.03
Row: 73, Col: 1, Value: 21773.12
Row: 74, Col: 1, Value: 20618.29
Row: 75, Col: 1, Value: 21046.49
Row: 76, Col: 1, Value: 21500.64
Row: 77, Col: 1, Value: 21280.05
Row: 78, Col: 1, Value: 23291.27
Row: 79, Col: 1, Value: 23589.71
Row: 80, Col: 1, Value: 23148.54
Row: 81, Col: 1, Value: 21344.93
Row: 82, Col: 1, Value: 20449.61
Row: 83, Col: 1, Value: 20553.41
Row: 84, Col: 1, Value: 21773.12
Row: 85, Col: 1, Value: 22630.13
Row: 86, Col: 1, Value: 24834.44
Row: 87, Col: 1, Value: 26712.68
Row: 88, Col: 1, Value: 28277.87
Row: 89, Col: 1, Value: 28434.39
Row: 90, Col: 1, Value: 30247.41
Row: 91, Col: 1, Value: 28551.78
Row: 92, Col: 1, Value: 30573.5
Row: 93, Col: 1, Value: 32112.6
Row: 94, Col: 1, Value: 32203.91
Row: 95, Col: 1, Value: 33129.98
Row: 96, Col: 1, Value: 31382.18
Row: 97, Col: 1, Value: 35058.25
Row: 98, Col: 1, Value: 36057.96
Row: 99, Col: 1, Value: 37228.09
Row: 100, Col: 1, Value: 36217.75
Row: 101, Col: 1, Value: 36610.66
Row: 102, Col: 1, Value: 37003.57
Row: 103, Col: 1, Value: 36105.49
Row: 104, Col: 1, Value: 37017.6
Row: 105, Col: 1, Value: 36330.01
Row: 106, Col: 1, Value: 36947.44
Row: 107, Col: 1, Value: 37775.36
Row: 108, Col: 1, Value: 39599.57
Row: 109, Col: 1, Value: 40630.38
Row: 110, Col: 1, Value: 41917.18
Row: 111, Col: 1, Value: 42193.71999999999
Row: 112, Col: 1, Value: 44210.06
Row: 113, Col: 1, Value: 44508.77
Row: 114, Col: 1, Value: 46271.2
Row: 115, Col: 1, Value: 46286.14
Row: 116, Col: 1, Value: 46793.96
Row: 117, Col: 1, Value: 49064.2
Row: 118, Col: 1, Value: 49168.75
Row: 119, Col: 1, Value: 49601.89
Row: 120, Col: 1, Value: 47734.91
Row: 121, Col: 1, Value: 49335.92
$
$49,336
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment in the fund over a
given period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of
time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that,
if achieved annually, would have produced the same cumulative total return
if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same
as actual year-by-year results.
THE S&P 500(Registered trademark) is the Standard & Poor's 500
Composite Stock Price Index, a widely recognized, unmanaged index of common
stock prices. The S&P 500 figures assume reinvestment of all dividends
paid by stocks included in the index. They do not, however, include any
allowance for the brokerage commissions or other fees you would pay if you
actually invested in those stocks.
YEAR-BY-YEAR TOTAL RETURNS
Calendar years 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993
Contrafund -8.27% 27.06% 13.32% -1.90% 21.02% 43.15% 3.94% 54.92%
15.89% 21.43%
Competitive funds average -2.03% 28.49% 14.20% 2.59% 14.33% 26.77% -4.72%
37.
08% 7.86% 10.61%
Percentage (%)
Row: 1, Col: 1, Value: -8.27
Row: 1, Col: 2, Value: -2.03
Row: 2, Col: 1, Value: 27.06
Row: 2, Col: 2, Value: 28.49
Row: 3, Col: 1, Value: 13.32
Row: 3, Col: 2, Value: 14.2
Row: 4, Col: 1, Value: -1.9
Row: 4, Col: 2, Value: 2.59
Row: 5, Col: 1, Value: 21.02
Row: 5, Col: 2, Value: 14.33
Row: 6, Col: 1, Value: 43.15
Row: 6, Col: 2, Value: 26.77
Row: 7, Col: 1, Value: 3.94
Row: 7, Col: 2, Value: -4.72
Row: 8, Col: 1, Value: 54.92
Row: 8, Col: 2, Value: 37.08
Row: 9, Col: 1, Value: 15.89
Row: 9, Col: 2, Value: 7.859999999999999
Row: 10, Col: 1, Value: 21.43
Row: 10, Col: 2, Value: 10.61
Contrafund
Competitive
funds
average
THE CONSUMER PRICE INDEX is a widely recognized measure of inflation
calculated by the U.S. government.
THE COMPETITIVE FUNDS AVERAGE is the Lipper Growth Funds Average ,
which currently reflects the performance of over 390 mutual funds
with similar objectives. This average, which assumes reinvestment of
distributions, is published by Lipper Analytical Services, Inc.
Other illustrations of fund performance may show moving averages over
specified periods.
The fund's recent strategies, performance, and holdings are detailed twice
a year in financial reports, which are sent to all shareholders. For
current performance or a free annual report, call 1-800-544-8888.
TOTAL RETURNS ARE BASED ON PAST RESULTS AND ARE NOT AN INDICATION OF FUTURE
PERFORMANCE.
YOUR ACCOUNT
DOING BUSINESS WITH FIDELITY
Fidelity Investments was established in 1946 to manage one of America's
first mutual funds. Today, Fidelity is the largest mutual fund company in
the country, and is known as an innovative provider of high-quality
financial services to individuals and institutions.
In addition to its mutual fund business, the company operates one of
America's leading discount brokerage firms, Fidelity Brokerage Services,
Inc. (FBSI). Fidelity is also a leader in providing tax-sheltered
retirement plans for individuals investing on their own or through their
employer.
Fidelity is committed to providing investors with practical information to
make investment decisions. Based in Boston, Fidelity provides customers
with complete service 24 hours a day, 365 days a year, through a network of
telephone service centers around the country.
To reach Fidelity for general information, call these numbers:
(bullet) For mutual funds, 1-800-544-8888
(bullet) For brokerage, 1-800-544-7272
If you would prefer to speak with a representative in person, Fidelity has
over 75 walk-in Investor Centers across the country.
TYPES OF ACCOUNTS
You may set up an account directly in the fund or, if you own or intend to
purchase individual securities as part of your total investment portfolio,
you may consider investing in the fund through a brokerage account.
If you are investing through FBSI or another financial institution or
investment professional, refer to its program materials for any special
provisions regarding your investment in the fund.
The different ways to set up (register) your account with Fidelity are
listed at right.
The account guidelines that follow may not apply to certain retirement
accounts. If your employer offers the fund through a retirement program,
contact your employer for more information. Otherwise, call Fidelity
directly.
FIDELITY FACTS
Fidelity offers the broadest
selection of mutual funds
in the world.
(bullet) Number of Fidelity mutual
funds: over 200
(bullet) Assets in Fidelity mutual
funds: over $ 225 billion
(bullet) Number of shareholder
accounts: over 15 million
(bullet) Number of investment
analysts and portfolio
managers: over 200
(checkmark)
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have two or
more owners (tenants).
RETIREMENT
TO SHELTER YOUR RETIREMENT SAVINGS FROM TAXES
Retirement plans allow individuals to shelter investment income and
capital gains from current taxes. In addition, contributions to these
accounts may be tax deductible. Retirement accounts require special
applications and typically have lower minimums.
(bullet) INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow anyone of legal age
and under 70 with earned income to invest up to $2,000 per tax year.
Individuals can also invest in a spouse's IRA if the spouse has earned
income of less than $250.
(bullet) ROLLOVER IRAS retain special tax advantages for certain
distributions from employer-sponsored retirement plans.
(bullet) KEOGH OR CORPORATE PROFIT SHARING AND MONEY PURCHASE PENSION PLANS
allow self-employed individuals or small business owners (and their
employees) to make tax-deductible contributions for themselves and any
eligible employees up to $30,000 per year.
(bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide small
business owners or those with self-employed income (and their eligible
employees) with many of the same advantages as a Keogh, but with fewer
administrative requirements.
(bullet) 403(B) CUSTODIAL ACCOUNTS are available to employees of most
tax-exempt institutions, including schools, hospitals, and other charitable
organizations.
(bullet) 401(K) PROGRAMS allow employees of corporations of all sizes to
contribute a percentage of their wages on a tax-deferred basis. These
accounts need to be established by the trustee of the plan.
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and obtain
tax benefits. An individual can give up to $10,000 a year per child without
paying federal gift tax. Depending on state laws, you can set up a
custodial account under the Uniform Gifts to Minors Act (UGMA) or the
Uniform Transfers to Minors Act (UTMA).
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR OTHER
GROUPS
Requires a special application.
HOW TO BUY SHARES
ONCE EACH BUSINESS DAY, TWO SHARE PRICES ARE CALCULATED FOR THE FUND: the
offering price and the net asset value (NAV). The offering price includes
the 3% sales charge, which you pay when you buy shares, unless you qualify
for a reduction or waiver as described on page . When you buy shares at the
offering price, Fidelity deducts 3% and invests the rest at the NAV.
Shares are purchased at the next share price calculated after your
investment is received and accepted. Share price is normally calculated at
4 p.m. Eastern time.
IF YOU ARE NEW TO FIDELITY, complete and sign an account application and
mail it along with your check. You may also open your account in person or
by wire as described on page . If there is no application accompanying this
prospectus, call 1-800-544-8888.
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(bullet) Mail in an application with a check, or
(bullet) Open your account by exchanging from another Fidelity fund.
IF YOU ARE INVESTING THROUGH A TAX-SHELTERED RETIREMENT PLAN, such as an
IRA, for the first time, you will need a special application. Retirement
investing also involves its own investment procedures. Call 1-800-544-8888
for more information and a retirement application.
If you buy shares by check or Fidelity Money Line(Registered trademark),
and then sell those shares by any method other than by exchange to another
Fidelity fund, the payment may be delayed for up to seven business
days to ensure that your previous investment has cleared.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $2,500
For Fidelity retirement accounts $500
TO ADD TO AN ACCOUNT $250
For Fidelity retirement accounts $250
Through automatic investment plans $100
MINIMUM BALANCE $1,000
For Fidelity retirement accounts $500
UNDERSTANDING
SHARE PRICE
Let's say you invest $2,500 at
an offering price of $10. Of
the $10 offering price, 3%
($.30) is the sales charge,
and 97% ($9.70) represents
the NAV. The value of your
initial investment will be
$2,425 (250 shares worth
$9.70 each), and you will
have paid a sales charge of
$75.
(checkmark)
Row: 1, Col: 1, Value: 25.0
Row: 1, Col: 2, Value: 75.0
Row: 1, Col: 3, Value: 75.0
Row: 1, Col: 4, Value: 75.0
Row: 1, Col: 5, Value: 75.0
Row: 1, Col: 6, Value: 75.0
Row: 1, Col: 7, Value: 75.0
Row: 1, Col: 8, Value: 75.0
Row: 1, Col: 9, Value: 75.0
Row: 1, Col: 10, Value: 75.0
Row: 1, Col: 11, Value: 75.0
Row: 1, Col: 12, Value: 75.0
Row: 1, Col: 13, Value: 75.0
Row: 1, Col: 14, Value: 75.0
Row: 1, Col: 15, Value: 75.0
Row: 1, Col: 16, Value: 75.0
Row: 1, Col: 17, Value: 75.0
Row: 1, Col: 18, Value: 75.0
Row: 1, Col: 19, Value: 75.0
Row: 1, Col: 20, Value: 75.0
Row: 1, Col: 21, Value: 75.0
Row: 1, Col: 22, Value: 75.0
Row: 1, Col: 23, Value: 75.0
Row: 1, Col: 24, Value: 75.0
Row: 1, Col: 25, Value: 75.0
Row: 1, Col: 26, Value: 75.0
Row: 1, Col: 27, Value: 75.0
Row: 1, Col: 28, Value: 75.0
Row: 1, Col: 29, Value: 75.0
Row: 1, Col: 30, Value: 75.0
Row: 1, Col: 31, Value: 75.0
Row: 1, Col: 32, Value: 75.0
Row: 1, Col: 33, Value: 75.0
Row: 1, Col: 34, Value: 75.0
$2,500 Investment
3% sales charge = $75
Value of Investment = $2,425
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TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
Phone 1-800-544-777 (phone_graphic) (bullet) Exchange from another (bullet) Exchange from another
Fidelity fund account Fidelity fund account
with the same with the same
registration, including registration, including
name, address, and name, address, and
taxpayer ID number. taxpayer ID number.
(bullet) Use Fidelity Money
Line to transfer from
your bank account. Call
before your first use to
verify that this service
is in place on your
account. Maximum
Money Line: $50,000.
</TABLE>
<TABLE>
<CAPTION>
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Mail (mail_graphic) (bullet) Complete and sign the (bullet) Make your check
application. Make your payable to "Fidelity
check payable to Contrafund . " Indicate
"Fidelity Contrafund . " your fund account
Mail to the address number on your check
indicated on the and mail to the address
application. printed on your account
statement.
(bullet) Exchange by mail: call
1-800-544-6666 for
instructions.
</TABLE>
<TABLE>
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In Person (hand_graphic) (bullet) Bring your application (bullet) Bring your check to a
and check to a Fidelity Fidelity Investor Center.
Investor Center. Call Call 1-800-544-9797 for
1-800-544-9797 for the the center nearest you.
center nearest you.
</TABLE>
<TABLE>
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Wire (wire_graphic) (bullet) Call 1-800-544-7777 to (bullet) Not available for
set up your account retirement accounts.
and to arrange a wire (bullet) Wire to:
transaction. Not Bankers Trust
available for retirement Company,
accounts. Bank Routing
(bullet) Wire within 24 hours to: #021001033,
Bankers Trust Account #00163053.
Company, Specify "Fidelity
Bank Routing Contrafund" and
#021001033, include your account
Account #00163053. number and your
Specify "Fidelity name.
Contrafund" and
include your new
account number and
your name.
</TABLE>
<TABLE>
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Automatically (automatic_graphic) (bullet) Not available. (bullet) Use Fidelity Automatic
Account Builder. Sign
up for this service
when opening your
account, or call
1-800-544-6666 to add
it.
</TABLE>
<TABLE>
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(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118
</TABLE>
HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares. Your shares will be sold at
the next share price calculated after your order is received and accepted.
Share price is normally calculated at 4 p.m. Eastern time.
TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you may use any of the methods
described on these two pages.
TO SELL SHARES IN A FIDELITY RETIREMENT ACCOUNT, your request must be made
in writing, except for exchanges to other Fidelity funds, which can be
requested by phone or in writing. Call 1-800-544-6666 for a retirement
distribution form.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at least $1,000
worth of shares in the account to keep it open ($500 for retirement
accounts).
TO SELL SHARES BY BANK WIRE OR FIDELITY MONEY LINE, you will need to sign
up for these services in advance.
CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to
protect you and Fidelity from fraud. Your request must be made in writing
and include a signature guarantee if any of the following situations apply:
(bullet) You wish to redeem more than $100,000 worth of shares,
(bullet) Your account registration has changed within the last 30 days,
(bullet) The check is being mailed to a different address than the one on
your account (record address),
(bullet) The check is being made payable to someone other than the account
owner, or
(bullet) The redemption proceeds are being transferred to a Fidelity
account with a different registration.
You should be able to obtain a signature guarantee from a bank, broker
(including Fidelity Investor Centers), dealer, credit union (if authorized
under state law), securities exchange or association, clearing agency, or
savings association. A notary public cannot provide a signature guarantee.
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
(bullet) Your name,
(bullet) The fund's name,
(bullet) Your fund account number,
(bullet) The dollar amount or number of shares to be redeemed, and
(bullet) Any other applicable requirements listed in the table at right.
Unless otherwise instructed, Fidelity will send a check to the record
address. Deliver your letter to a Fidelity Investor Center, or mail it to:
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
ACCOUNT TYPE SPECIAL REQUIREMENTS
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Phone 1-800-544-777 (phone_graphic) All account types (bullet) Maximum check request:
except retirement $100,000.
(bullet) For Money Line transfers to
All account types your bank account; minimum:
$10 ; maximum: $100,000.
(bullet) You may exchange to other
Fidelity funds if both
accounts are registered with
the same name(s), address,
and taxpayer ID number.
Mail or in Person (mail_graphic)(hand_graphic) Individual, Joint (bullet) The letter of instruction must
Tenant, be signed by all persons
Sole Proprietorship required to sign for
, UGMA, UTMA transactions, exactly as their
Retirement account names appear on the
account.
(bullet) The account owner should
Trust complete a retirement
distribution form. Call
1-800-544-6666 to request
one.
Business or (bullet) The trustee must sign the
Organization letter indicating capacity as
trustee. If the trustee's name
is not in the account
registration, provide a copy of
the trust document certified
within the last 60 days.
Executor, (bullet) At least one person
Administrator, authorized by corporate
Conservator, resolution to act on the
Guardian account must sign the letter.
(bullet) Include a corporate
resolution with corporate seal
or a signature guarantee.
(bullet) Call 1-800-544-6666 for
instructions.
Wire (wire_graphic) All account types (bullet) You must sign up for the wire
except retirement feature before using it. To
verify that it is in place, call
1-800-544-6666. Minimum
wire: $5,000.
(bullet) Your wire redemption request
must be received by Fidelity
before 4 p.m. Eastern time
for money to be wired on the
next business day.
</TABLE>
<TABLE>
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(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118
</TABLE>
INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your account.
INFORMATION SERVICES
FIDELITY'S TELEPHONE REPRESENTATIVES are available 24 hours a day, 365 days
a year. Whenever you call, you can speak with someone equipped to provide
the information or service you need.
STATEMENTS AND REPORTS that Fidelity sends to you include the following:
(bullet) Confirmation statements (after every transaction, except
reinvestments, that affects your account balance or your account
registration)
(bullet) Account statements (quarterly)
(bullet) Financial reports (every six months)
24-HOUR SERVICE
ACCOUNT ASSISTANCE
1-800-544-6666
ACCOUNT BALANCES
1-800-544-7544
ACCOUNT TRANSACTIONS
1-800-544-7777
PRODUCT INFORMATION
1-800-544-8888
QUOTES
1-800-544-8544
RETIREMENT ACCOUNT
ASSISTANCE
1-800-544-4774
AUTOMATED SERVICE
(checkmark)
To reduce expenses, only one copy of most financial reports will be mailed
to your household, even if you have more than one account in the fund. Call
1-800-544-6666 if you need copies of financial reports or historical
account information.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your fund shares and buy shares of other
Fidelity funds by telephone or in writing. The shares you exchange will
carry credit for any sales charge you previously paid in connection with
their purchase.
Note that exchanges out of the fund are limited to four per calendar year,
and that they may have tax consequences for you. For complete policies and
restrictions governing exchanges, including circumstances under which a
shareholder's exchange privilege may be suspended or revoked, see page .
SYSTEMATIC WITHDRAWAL PLANS let you set up monthly or quarterly redemptions
from your account. Because of the fund's sales charge, you may not want to
set up a systematic withdrawal plan during a period when you are buying
shares on a regular basis.
FIDELITY MONEY LINE(Registered trademark) enables you to transfer money by
phone between your bank account and your fund account. Most transfers are
complete within three business days of your call.
REGULAR INVESTMENT PLANS
One easy way to pursue your financial goals is to invest money regularly.
Fidelity offers convenient services that let you transfer money into your
fund account, or between fund accounts, automatically. While regular
investment plans do not guarantee a profit and will not protect you against
loss in a declining market, they can be an excellent way to invest for
retirement, a home, educational expenses, and other long-term financial
goals. Certain restrictions apply for retirement accounts. Call
1-800-544-6666 for more information.
REGULAR INVESTMENT PLANS
FIDELITY AUTOMATIC ACCOUNT BUILDERSM
TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY FUND
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly or (bullet) For a new account, complete the
quarterly appropriate section on the fund
application.
(bullet) For existing accounts, call
1-800-544-6666 for an application.
(bullet) To change the amount or frequency of
your investment, call 1-800-544-6666 at
least three business days prior to your
next scheduled investment date.
<TABLE>
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DIRECT DEPOSIT
TO SEND ALL OR A PORTION OF YOUR PAYCHECK OR GOVERNMENT CHECK TO A FIDELITY FUNDA
</TABLE>
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Every pay (bullet) Check the appropriate box on the fund
period application, or call 1-800-544-6666 for an
authorization form.
(bullet) Changes require a new authorization
form.
<TABLE>
<CAPTION>
<S> <C> <C>
FIDELITY AUTOMATIC EXCHANGE SERVICE
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO ANOTHER FIDELITY FUND
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly, (bullet) To establish, call 1-800-544-6666 after
bimonthly, both accounts are opened.
quarterly, or (bullet) To change the amount or frequency of
annually your investment, call 1-800-544-6666.
</TABLE>
A BECAUSE ITS SHARE PRICE FLUCTUATES, THE FUND MAY NOT BE AN APPROPRIATE
CHOICE FOR DIRECT DEPOSIT OF YOUR ENTIRE CHECK.
DIVIDENDS, CAPITAL GAINS, AND TAXES
The fund distributes substantially all of its net income and capital gains
to shareholders each year. Normally, dividends and capital gains are
distributed in February and December.
DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. If the option you prefer is not listed on the
application, call 1-800-544-6666 for instructions. The fund offers four
options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions will
be automatically reinvested in additional shares of the fund. If you do not
indicate a choice on your application, you will be assigned this option.
2. INCOME-EARNED OPTION. Your capital gain distributions will be
automatically reinvested, but you will be sent a check for each dividend
distribution.
3. CASH OPTION. You will be sent a check for your dividend and capital gain
distributions.
4. DIRECTED DIVIDENDS(Registered trademark) OPTION. Your dividend and
capital gain distributions will be automatically invested in another
identically registered Fidelity fund.
FOR RETIREMENT ACCOUNTS, all distributions are automatically reinvested.
When you are over 59 years old, you can receive distributions in cash.
SHARES PURCHASED THROUGH REINVESTMENT of dividend and capital gain
distributions are not subject to the fund's 3% sales charge. Likewise, if
you direct distributions to a fund with a 3% sales charge, you will not pay
a sales charge on those purchases.
When the fund deducts a distribution from its NAV, the reinvestment price
is the fund's NAV at the close of business that day. Cash distribution
checks will be mailed within seven days , or longer for a December
ex-dividend date.
UNDERSTANDING
DISTRIBUTIONS
As a fund shareholder, you
are entitled to your share of
the fund's net income and
gains on its investments. The
fund passes its earnings
along to its investors as
DISTRIBUTIONS.
The fund earns dividends
from stocks and interest from
bond, money market, and
other investments. These are
passed along as DIVIDEND
DISTRIBUTIONS. The fund
realizes capital gains
whenever it sells securities
for a higher price than it paid
for them. These are passed
along as CAPITAL GAIN
DISTRIBUTIONS.
(checkmark)
TAXES
As with any investment, you should consider how your investment in the fund
will be taxed. If your account is not a tax-deferred retirement account,
you should be aware of these tax implications.
TAXES ON DISTRIBUTIONS. Distributions are subject to federal income tax,
and may also be subject to state or local taxes. If you live outside the
United States, your distributions could also be taxed by the country in
which you reside. Your distributions are taxable when they are paid,
whether you take them in cash or reinvest them. However, distributions
declared in December and paid in January are taxable as if they were paid
on December 31.
For federal tax purposes, the fund's income and short-term capital gain
distributions are taxed as dividends; long-term capital gain distributions
are taxed as long-term capital gains. Every January, Fidelity will send you
and the IRS a statement showing the taxable distributions paid to you in
the previous year.
TAXES ON TRANSACTIONS. Your redemptions - including exchanges to other
Fidelity funds - are subject to capital gains tax. A capital gain or loss
is the difference between the cost of your shares and the price you receive
when you sell them.
Whenever you sell shares of the fund, Fidelity will send you a confirmation
statement showing how many shares you sold and at what price. You will also
receive a consolidated transaction statement every January. However, it is
up to you or your tax preparer to determine whether this sale resulted in a
capital gain and, if so, the amount of tax to be paid. Be sure to keep your
regular account statements; the information they contain will be essential
in calculating the amount of your capital gains.
"BUYING A DIVIDEND." If you buy shares just before the fund deducts a
distribution from its NAV, you will pay the full price for the shares and
then receive a portion of the price back in the form of a taxable
distribution.
There are tax requirements that all funds must follow in order to avoid
federal taxation. In its effort to adhere to these requirements, the fund
may have to limit its investment activity in some types of instruments.
SHAREHOLDER AND ACCOUNT POLICIES
TRANSACTION DETAILS
THE FUND IS OPEN FOR BUSINESS each day the New York Stock Exchange (NYSE)
is open. Fidelity normally calculates the fund's net asset value and
offering price as of the close of business of the NYSE, normally 4 p.m.
Eastern time.
THE FUND'S NAV is the value of a single share. The NAV is computed by
adding the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and then dividing the result by the number of
shares outstanding.
The fund's assets are valued primarily on the basis of market quotations.
If quotations are not readily available, assets are valued by a method that
the Board of Trustees believes accurately reflects fair value. Foreign
securities are valued on the basis of quotations from the primary market in
which they are traded, and are translated from the local currency into U.S.
dollars using current exchange rates.
THE OFFERING PRICE (price to buy one share) is the fund's NAV plus a sales
charge. The sales charge is 3% of the offering price, or 3.09% of the net
amount invested. The REDEMPTION PRICE (price to sell one share) is the
fund's NAV.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that
your Social Security or taxpayer identification number is correct and that
you are not subject to 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require the fund to
withhold 31% of your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Note that Fidelity will
not be responsible for any losses resulting from unauthorized transactions
if it follows reasonable procedures designed to verify the identity of the
caller. Fidelity will request personalized security codes or other
information, and may also record calls. You should verify the accuracy of
your confirmation statements immediately after you receive them. If you do
not want the ability to redeem and exchange by telephone, call Fidelity for
instructions.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during periods
of unusual market activity), consider placing your order by mail or by
visiting a Fidelity Investor Center.
THE FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. The fund also reserves the right to reject any specific purchase
order, including certain purchases by exchange. See "Exchange Restrictions"
on page . Purchase orders may be refused if, in FMR's opinion, they are of
a size that would disrupt management of the fund.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your order will be processed at the
next offering price calculated after your order is received and accepted.
Note the following:
(bullet) All of your purchases must be made in U.S. dollars and checks
must be drawn on U.S. banks.
(bullet) Fidelity does not accept cash.
(bullet) When making a purchase with more than one check, each check must
have a value of at least $50.
(bullet) The fund reserves the right to limit the number of checks
processed at one time.
(bullet) If your check does not clear, your purchase will be cancelled and
you could be liable for any losses or fees the fund or its transfer agent
has incurred.
TO AVOID THE COLLECTION PERIOD associated with check and Money Line
purchases, consider buying shares by bank wire, U.S. Postal money order,
U.S. Treasury check, Federal Reserve check, or direct deposit instead.
YOU MAY BUY SHARES OF THE FUND (AT THE OFFERING PRICE) OR SELL THEM THROUGH
A BROKER, who may charge you a fee for this service. If you invest through
a broker or other institution, read its program materials for any
additional service features or fees that may apply.
CERTAIN FINANCIAL INSTITUTIONS that have entered into sales agreements with
Fidelity Distributors Corporation (FDC) may enter confirmed purchase orders
on behalf of customers by phone, with payment to follow no later than the
time when the fund is priced on the following business day. If payment is
not received by that time, the financial institution could be held liable
for resulting fees or losses.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your request is received and accepted. Note the
following:
(bullet) Normally, redemption proceeds will be mailed to you on the next
business day, but if making immediate payment could adversely affect the
fund, it may take up to seven days to pay you.
(bullet) Fidelity Money Line redemptions generally will be credited to
your bank account on the second or third business day after your phone
call.
(bullet) The fund may hold payment on redemptions until it is reasonably
satisfied that investments made by check or Fidelity Money Line have been
collected, which can take up to seven business days.
(bullet) Redemptions may be suspended or payment dates postponed when the
NYSE is closed (other than weekends or holidays), when trading on the NYSE
is restricted, or as permitted by the SEC.
TO SELL CERTIFICATE SHARES, call 1-800-544-6666 for instructions. The fund
no longer issues certificate shares.
IF YOUR ACCOUNT BALANCE FALLS BELOW $1,000, you will be given 30 days'
notice to reestablish the minimum balance. If you do not increase your
balance, Fidelity reserves the right to close your account and send the
proceeds to you. Your shares will be redeemed at the NAV on the day your
account is closed.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
FDC collects the proceeds from the fund's 3% sales charge and may pay a
portion of them to securities dealers who have sold the fund's shares, or
to others, including banks and other financial institutions (qualified
recipients), under special arrangements in connection with FDC's sales
activities. The sales charge paid to qualified recipients is 2.75% of the
fund's offering price.
FDC may, at its own expense, provide promotional incentives to qualified
recipients who support the sale of shares of the fund without reimbursement
from the fund. In some instances, these incentives may be offered only to
certain institutions whose representatives provide services in connection
with the sale or expected sale of significant amounts of shares.
EXCHANGE RESTRICTIONS
As a shareholder, you have the privilege of exchanging shares of the fund
for shares of other Fidelity funds. However, you should note the following:
(bullet) The fund you are exchanging into must be registered for sale in
your state.
(bullet) You may only exchange between accounts that are registered in the
same name, address, and taxpayer identification number.
(bullet) Before exchanging into a fund, read its prospectus.
(bullet) If you exchange into a fund with a sales charge, you pay the
percentage-point difference between that fund's sales charge and any sales
charge you have previously paid in connection with the shares you are
exchanging. For example, if you had already paid a sales charge of 2% on
your shares and you exchange them into a fund with a 3% sales charge, you
would pay an additional 1% sales charge.
(bullet) Exchanges may have tax consequences for you.
(bullet) Because excessive trading can hurt fund performance and
shareholders, the fund reserves the right to temporarily or permanently
terminate the exchange privilege of any investor who makes more than four
exchanges out of the fund per calendar year. Accounts under common
ownership or control, including accounts with the same taxpayer
identification number, will be counted together for purposes of the four
exchange limit.
(bullet) The exchange limit may be modified for accounts in certain
institutional retirement plans to conform to plan exchange limits and
Department of Labor regulations. See your plan materials for further
information.
(bullet) The fund reserves the right to refuse exchange purchases by any
person or group if, in FMR's judgment, the fund would be unable to invest
the money effectively in accordance with its investment objective and
policies, or would otherwise potentially be adversely affected.
(bullet) Your exchanges may be restricted or refused if the fund receives
or anticipates simultaneous orders affecting significant portions of the
fund's assets. In particular, a pattern of exchanges that coincide with a
"market timing" strategy may be disruptive to the fund.
Although the fund will attempt to give you prior notice whenever it is
reasonably able to do so, it may impose these restrictions at any time. The
fund reserves the right to terminate or modify the exchange privilege in
the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose
administrative fees of up to $7.50 and redemption fees of up to 1.50% on
exchanges. Check each fund's prospectus for details.
SALES CHARGE REDUCTIONS AND WAIVERS
REDUCTIONS. The fund's sales charge may be reduced if you invest directly
with Fidelity or through prototype or prototype-like retirement plans
sponsored by FMR or FMR Corp. The amount you invest, plus the value of your
account, must fall within the ranges shown below. However, purchases made
with assistance or intervention from a financial intermediary are not
eligible. Call Fidelity to see if your purchase qualifies.
Ranges Sales charge Net amount invested
$0 - 249,999 3% 3.09%
$250,000 - 499,999 2% 2.04%
$500,000 - 999,999 1% 1.01%
$1,000,000 or more none none
The sales charge will also be reduced by the percentage of any sales charge
you previously paid on investments in other Fidelity funds (not including
Fidelity's Foreign Currency Funds). Similarly, your shares carry credit for
any sales charge you would have paid if the reductions in the table above
had not existed. These sales charge credits only apply to purchases made in
one of the ways listed below, and only if you continuously owned Fidelity
fund shares or a Fidelity brokerage core account, or participated in The
CORPORATEplan for Retirement Program.
1. By exchange from another Fidelity fund.
2. With proceeds of a transaction within a Fidelity brokerage core account,
including any free credit balance, core money market fund, or margin
availability, to the extent such proceeds were derived from redemption
proceeds from another Fidelity fund.
3. With redemption proceeds from one of Fidelity's Foreign Currency Funds,
if the Foreign Currency Fund shares were originally purchased with
redemption proceeds from a Fidelity fund.
4. Through the Directed Dividends Option (see page ).
5. By participants in The CORPORATEplan for Retirement Program when shares
are purchased through plan-qualified loan repayments, and for exchanges
into and out of the Managed Income Portfolio.
WAIVERS. The fund's sales charge will not apply:
1. If you buy shares as part of an employee benefit plan having more than
200 eligible employees or a minimum of $3 million in plan assets invested
in Fidelity mutual funds. Plan sponsors are encouraged to notify Fidelity
when they first satisfy either of these requirements.
2. To shares in a Fidelity Rollover IRA account purchased with the proceeds
of a distribution from an employee benefit plan, provided that at the time
of the distribution, the employer or its affiliate maintained a plan that
both qualified for waiver (1) above and had at least some of its assets
invested in Fidelity-managed products.
3. If you are a charitable organization (as defined in Section 501(c)(3) of
the Internal Revenue Code) investing $100,000 or more.
4. If you purchase shares for a charitable remainder trust or life income
pool established for the benefit of a charitable organization (as defined
by Section 501(c)(3) of the Internal Revenue Code).
5. If you are an investor participating in the Fidelity Trust Portfolios
program.
6. To shares purchased through Portfolio Advisory Services.
7. If you are a current or former trustee or officer of a Fidelity fund or
a current or retired officer, director, or full-time employee of FMR Corp.
or its direct or indirect subsidiaries (a Fidelity Trustee or employee),
the spouse of a Fidelity trustee or employee, a Fidelity trustee or
employee acting as custodian for a minor child, or a person acting as
trustee of a trust for the sole benefit of the minor child of a Fidelity
trustee or employee.
8. If you are a bank trust officer, registered representative, or other
employee of a qualified recipient, as defined on page .
9. To contributions and exchanges to a prototype or prototype-like
retirement plan sponsored by FMR Corp. or FMR and which is marketed and
distributed directly to plan sponsors or participants without any
assistance or intervention from any intermediary distribution channel.
10. If you are a registered investment adviser (RIA) purchasing for your
discretionary accounts, provided you execute a Fidelity RIA load waiver
agreement which specifies certain aggregate minimum and operating
provisions. This waiver is available only for shares purchased directly
from Fidelity, without a broker, and is unavailable if the RIA is part of
an organization principally engaged in the brokerage business.
11. If you are a trust institution or bank trust department purchasing for
your non-discretionary, non-retirement fiduciary accounts, provided you
execute a Fidelity Trust load waiver agreement which specifies certain
aggregate minimum and operating provisions. This waiver is available only
for shares purchased either directly from Fidelity or through a
bank-affiliated broker, and is available, if the trust department or
institution is part of an organization not principally engaged in banking
or trust activities.
These waivers must be qualified through FDC in advance. More detailed
information about waivers (1), (2), (5), and ( 9 ) is contained in the
Statement of Additional Information. A representative of your plan or
organization should call Fidelity for more information.
THE FUND IN DETAIL
CHARTER
CONTRAFUND IS A MUTUAL FUND: an investment that pools shareholders' money
and invests it toward a specified goal. In technical terms, the fund is
currently an open-end, diversified management investment company
organized as a Massachusetts business trust on December 31, 1984.
THE FUND IS GOVERNED BY A BOARD OF TRUSTEES, which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet throughout the year to oversee the fund's activities,
review contractual arrangements with companies that provide services to the
fund, and review performance. The majority of trustees are not otherwise
affiliated with Fidelity.
THE FUND MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These meetings
may be called to elect or remove trustees, change fundamental policies,
approve a management contract, or for other purposes. Shareholders not
attending these meetings are encouraged to vote by proxy. Fidelity will
mail proxy materials in advance, including a voting card and information
about the proposals to be voted on. You are entitled to one vote for each
share you own.
FMR AND ITS AFFILIATES
The fund is managed by FMR, which chooses the fund's investments and
handles its business affairs. Fidelity Management & Research (U.K.)
Inc. (FMR U.K.) and Fidelity Management & Research (Far East) Inc. (FMR
Far East) assist FMR with foreign investments.
William Danoff is vice president and manager of Contrafund, which he has
managed since October 1990. Previously, he manged Select Retailing and
assisted on Magellan. Mr. Danoff joined Fidelity in 1986 as an equity
analyst.
FDC distributes and markets Fidelity's funds and services. Fidelity Service
Co. (FSC) performs transfer agent servicing functions for the fund.
FMR Corp. is the parent company of these organizations. Through ownership
of voting common stock, Edward C. Johnson 3d (President and a trustee of
the trust), Johnson family members, and various trusts for the benefit of
the Johnson family form a controlling group with respect to FMR Corp.
A broker-dealer may use a portion of the commissions paid by the
fund to reduce custodian or transfer agent fees. FMR may use its
broker-dealer affiliates and other firms that sell fund shares to carry
out the fund's transactions, provided that the fund receives
brokerage services and commission rates comparable to those of other
broker-dealers.
BREAKDOWN OF EXPENSES
Like all mutual funds, the fund pays fees related to its daily operations.
Expenses paid out of the fund's assets are reflected in its share price or
dividends; they are neither billed directly to shareholders nor deducted
from shareholder accounts.
The fund pays a MANAGEMENT FEE to FMR for managing its investments and
business affairs. FMR in turn pays fees to affiliates who provide
assistance with these services. The fund also pays OTHER EXPENSES, which
are explained on page .
FMR may, from time to time, agree to reimburse the fund for management fees
and other expenses above a specified limit. FMR retains the ability to be
repaid by the fund if expenses fall below the specified limit prior to the
end of the fiscal year. Reimbursement arrangements, which may be terminated
at any time without notice, can decrease the fund's expenses and boost its
performance.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month. The amount of
the fee is determined by taking a BASIC FEE and then applying a PERFORMANCE
ADJUSTMENT. The performance adjustment either increases or decreases the
management fee, depending on how well the fund has performed relative to
the S&P 500.
Manage = Ba +/- Performa
ment sic nce
fee fee adjustme
nt
THE BASIC FEE RATE (calculated monthly) is calculated by adding a group fee
rate to an individual fund fee rate, and multiplying the result by the
fund's average net assets. The group fee rate is based on the average net
assets of all the mutual funds advised by FMR. This rate cannot rise above
.52%, and it drops as total assets under management increase.
For December 1993, the group fee rate was .3243 %. The individual
fund fee rate is .30%. The basic fee rate for fiscal 1993 was
.6243 %.
THE PERFORMANCE ADJUSTMENT RATE is calculated monthly by comparing the
fund's performance to that of the S&P 500 over the most recent 36-month
period. The difference is translated into a dollar amount that is added to
or subtracted from the basic fee. The maximum annualized performance
adjustment rate is ".20%.
UNDERSTANDING THE
MANAGEMENT FEE
The basic fee FMR receives
is designed to be responsive
to changes in FMR's total
assets under management.
Building this variable into the
fee calculation assures
shareholders that they will
pay a lower rate as FMR's
assets under management
increase.
Another variable, the
performance adjustment,
rewards FMR when the fund
outperforms the S&P
500 (an established index of
stock market performance)
and reduces FMR's fee when
the fund underperforms this
index.
(checkmark)
FMR HAS SUB-ADVISORY AGREEMENTS with FMR U.K. and FMR Far East. These
sub-advisers provide FMR with investment research and advice on companies
based outside the United States. Under the sub-advisory agreements, FMR
pays FMR U.K. and FMR Far East fees equal to 110% and 105%, respectively,
of the costs of providing these services.
OTHER EXPENSES
While the management fee is a significant component of the fund's annual
operating costs, the fund has other expenses as well.
The fund contracts with FSC to perform many transaction and accounting
functions. These services include processing shareholder transactions,
valuing the fund's investments, and handling securities loans. In fiscal
1993, the fund paid FSC fees equal to .33 % of its average net
assets.
The fund also pays other expenses, such as legal, audit, and custodian
fees; proxy solicitation costs; and the compensation of trustees who are
not affiliated with Fidelity.
The fund's portfolio turnover rate for fiscal 1993 was 255 %. This
rate varies from year to year. High turnover rates increase transaction
costs and may increase taxable capital gains. FMR considers these effects
when evaluating the anticipated benefits of short-term investing.
INVESTMENT PRINCIPLES
THE FUND SEEKS CAPITAL APPRECIATION by investing in companies that
FMR believes to be undervalued due to an overly pessimistic appraisal by
the public. In pursuit of the fund's goal, FMR looks for companies with the
following characteristics:
(bullet) unpopular, but improvements seem possible due to developments
such as a change in management, a new product line, or an improved balance
sheet,
(bullet) recently popular, but temporarily out of favor due to short-term
or one-time factors, or
(bullet) undervalued compared to other companies in the same
industry .
This strategy can lead to investments in domestic or foreign companies,
many of which may not be well known. The stocks of small companies often
involve more risk than those of larger companies. The fund usually invests
primarily in common stock and securities convertible into common stock, but
it has the flexibility to invest in any type of security that may produce
capital appreciation.
THE FUND WILL SPREAD INVESTMENT RISK by limiting its holdings in any one
company or industry. FMR may use various investment techniques to hedge the
fund's risks, but there is no guarantee that these strategies will work as
FMR intends. When you sell your shares, they may be worth more or less than
what you paid for them.
FMR normally invests the fund's assets according to its investment
strategy. When FMR considers it appropriate for defensive purposes ,
however, it may temporarily invest substantially in investment-grade,
fixed-income obligations of all types and U.S. government obligations.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which the fund may invest, and strategies FMR may employ in
pursuit of the fund's investment objective. A summary of risks and
restrictions associated with these instrument types and investment
practices is included as well. Policies and limitations are considered at
the time of purchase; the sale of instruments is not required in the event
of a subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these techniques to
the full extent permitted unless it believes that doing so will help the
fund achieve its goal. As a shareholder, you will receive financial reports
every six months detailing fund holdings and describing recent investment
activities.
EQUITY SECURITIES may include common stocks, preferred stocks, convertible
securities, and warrants. Common stocks, the most familiar type, represent
an equity (ownership) interest in a corporation. This ownership interest
often gives the fund the right to vote on measures affecting the company's
organization and operations. Although common stocks have a history of
long-term growth in value, their prices tend to fluctuate in the short
term, particularly those of smaller companies.
RESTRICTIONS: With respect to 75% of total assets, the fund may not own
more than 10% of the outstanding voting securities of a single issuer.
DEBT SECURITIES. Bonds and other debt instruments are used by issuers to
borrow money from investors. The issuer pays the investor a fixed or
variable rate of interest, and must repay the amount borrowed at maturity.
Some debt securities, such as zero coupon bonds, do not pay current
interest, but are purchased at a discount from their face values. Debt
securities, loans, and other direct debt have varying degrees of quality
and varying levels of sensitivity to changes in interest rates. Longer-term
bonds are generally more sensitive to interest rate changes than short-term
bonds.
RESTRICTIONS: The fund does not currently intend to invest more than
5% of its assets in lower-quality debt securities sometimes called "junk
bonds" (those rated below Baa by Moody's Investors Service, Inc. or BBB
by Standard & Poor's Corporation, and unrated securities judged by FMR
to be of equivalent quality).
FOREIGN SECURITIES and foreign currencies may involve additional risks.
These include currency fluctuations, risks relating to political or
economic conditions in the foreign country, and the potentially less
stringent investor protection and disclosure standards of foreign markets.
In addition to the political and economic factors that can affect foreign
securities, a governmental issuer may be unwilling to repay principal and
interest when due, and may require that the conditions for payment be
renegotiated. These factors could make foreign investments, especially
those in developing countries, more volatile.
ADJUSTING INVESTMENT EXPOSURE. The fund can use various techniques to
increase or decrease its exposure to changing security prices, interest
rates, currency exchange rates, commodity prices, or other factors that
affect security values. These techniques may involve derivative
transactions such as buying and selling options and futures contracts,
entering into currency exchange contracts or swap agreements, and
purchasing indexed securities.
FMR can use these practices to adjust the risk and return characteristics
of the fund's portfolio of investments. If FMR judges market conditions
incorrectly or employs a strategy that does not correlate well with the
fund's investments, these techniques could result in a loss, regardless of
whether the intent was to reduce risk or increase return. These techniques
may increase the volatility of the fund and may involve a small investment
of cash relative to the magnitude of the risk assumed. In addition, these
techniques could result in a loss if the counterparty to the transaction
does not perform as promised.
REPURCHASE AGREEMENTS. In a repurchase agreement, the fund buys a security
at one price and simultaneously agrees to sell it back at a higher price.
Delays or losses could result if the other party to the agreement defaults
or becomes insolvent.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by
FMR, under the supervision of the Board of Trustees, to be illiquid, which
means that they may be difficult to sell promptly at an acceptable price.
The sale of other securities may be subject to legal restrictions.
Difficulty in selling securities may result in a loss or may be costly to
the fund.
RESTRICTIONS: The fund may not purchase a security if, as a result, more
than 10% of its assets would be invested in illiquid securities.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the
risks of investing. This may include limiting the amount of money invested
in any one issuer or, on a broader scale, in any one industry.
RESTRICTIONS: With respect to 75% of total assets, the fund may not invest
more than 5% of its total assets in any one issuer. The fund may not invest
more than 25% of its total assets in any one industry. These limitations do
not apply to U.S. government securities.
BORROWING. The fund may borrow from banks or from other funds advised by
FMR, or through reverse repurchase agreements. If the fund borrows money,
its share price may be subject to greater fluctuation until the borrowing
is paid off. If the fund makes additional investments while borrowings are
outstanding, this may be considered a form of leverage.
RESTRICTIONS: The fund may borrow only for temporary or emergency purposes,
but not in an amount exceeding 33% of its total assets.
LENDING. Lending securities to broker-dealers and institutions, including
FBSI, an affiliate of FMR, is a means of earning income. This practice
could result in a loss or a delay in recovering the fund's securities. The
fund may also lend money to other funds advised by FMR.
RESTRICTIONS: Loans, in the aggregate, may not exceed 33% of the fund's
total assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraph restates all those that are fundamental. All policies
stated throughout this prospectus, other than those identified in the
following paragraph, can be changed without shareholder approval.
The fund seeks capital appreciation by investing in securities of companies
believed by FMR to be undervalued due to an overly pessimistic appraisal by
the public of their future outlook. FMR will study the outlook for
individual companies and industries and their relative market positions,
and will invest in the securities of companies (1) which have been
unpopular for some time but where recent developments bring hope of
improved operating results; (2) which have enjoyed recent market popularity
but which appear to have temporarily fallen out of favor for reasons that
are considered non-recurring or short term; or (3) which appear undervalued
in relation to popular securities of other companies in the same industry.
The fund will remain substantially fully invested in common stocks,
preferred stocks, bonds, securities with warrants attached, and other
certificates of indebtedness. The fund will usually be primarily invested
in common stocks and securities convertible into common stocks. However, if
FMR believes that market conditions warrant a more conservative approach,
the fund may make substantial investments in investment-grade fixed-income
obligations of all types and U.S. government obligations. With respect to
75% of total assets, the fund may not invest more than 5% of its total
assets in any one issuer and may not own more than 10% of the outstanding
voting securities of a single issuer. The fund may not invest more than 25%
of its total assets in any one industry. The fund may borrow only for
temporary or emergency purposes, but not in an amount exceeding 33% of its
total assets. Loans, in the aggregate, may not exceed 33% of the fund's
total assets.
This prospectus is printed on recycled paper using soy-based inks.
FIDELITY CONTRAFUND
STATEMENT OF ADDITIONAL INFORMATION
FEBRUARY 19, 1994
This Statement is not a prospectus but should be read in conjunction with
the fund's current Prospectus (dated February 19, 1994). Please retain this
document for future reference. The Annual Report for the fiscal year ended
December 31, 1993 is incorporated herein by reference. To obtain an
additional copy of the Prospectus or the Annual Report, please call
Fidelity Distributors Corporation at 1-800-544-8888.
TABLE OF CONTENTS PAGE
Investment Policies and Limitations
Portfolio Transactions
Valuation of Portfolio Securities
Performance
Additional Purchase and Redemption Information
Distributions and Taxes
FMR
Trustees and Officers
Management Contract
Contracts With Companies Affiliated With FMR
Description of the Fund
Financial Statements
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.) Inc. (FMR U.K.)
Fidelity Management & Research (Far East) Inc. (FMR Far East)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT
Fidelity Service Co. (FSC)
CON-ptb-294
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in the
Prospectus. Unless otherwise noted, whenever an investment policy or
limitation states a maximum percentage of the fund's assets that may be
invested in any security or other asset, or sets forth a policy regarding
quality standards, such standard or percentage limitation will be
determined immediately after and as a result of the fund's acquisition of
such security or other asset. Accordingly, any subsequent change in values,
net assets, or other circumstances will not be considered when determining
whether the investment complies with the fund's investment policies and
limitations.
The fund's fundamental investment policies and limitations cannot be
changed without approval by a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940) of the fund.
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than securities issued or guaranteed by the U.S.
government or any of its agencies or instrumentalities) if, as a result
thereof, (a) more than 5% of the fund's total assets would be invested in
the securities of such issuer, or (b) the fund would hold more than 10% of
the voting securities of such issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of the value of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings that
come to exceed 33 1/3% of the value of the fund's total assets by reason of
a decline in net assets will be reduced within three days (exclusive of
Sundays and holidays) to the extent necessary to comply with the 33 1/3%
limitation;
(4) underwrite securities issued by others except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than obligations issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to
repurchase agreements.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to cons t itute selling
securities short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute p u rchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (3)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to lend assets other than securities
to other parties, except by (a) lending money (up to 5% of the fund's net
assets) to a registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) acquiring loans, loan
participations, or other forms of direct debt instruments and, in
connection therewith, assuming any associated unfunded commitments of the
sellers. (This limitation does not apply to purchases of debt securities or
to repurchase agreements.)
(vi) The fund does not currently intend to (a) purchase securities of other
investment companies, except in the open market where no commission except
the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(vii) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(viii) The fund does not currently intend to purchase warrants, valued at
the lower of cost or market, in excess of 5% of the fund's net assets.
Included in that amount, but not to exceed 2% of the fund's net assets, may
be warrants that are not listed on the New York Stock Exchange or the
American Stock Exchange. Warrants acquired by the fund in units or attached
to securities are not subject to these restrictions.
(ix) The fund does not currently intend to invest in oil, gas, or other
mineral exploration or development programs or leases.
(x) The fund does not currently intend to purchase the securities of any
issuer if those officers and Trustees of the fund and those officers and
directors of FMR who individually own more than 1/2 of 1% of the securities
of such issuer together own more than 5% of such issuer's securities.
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions" on page
.
AFFILIATED BANK TRANSACTIONS. The fund may engage in transactions
with banks that are, or may be considered to be, "affiliated persons" of
the fund under the Investment Company Act of 1940. Such transactions may be
entered into only pursuant to procedures established and periodically
reviewed by the Board of Trustees. These transactions may include
repurchase agreements with custodian banks; purchases, as principal, of
short-term obligations of, and repurchase agreements with, the 50 largest
U.S. banks (measured by deposits); transactions in municipal securities;
and transactions in U.S. government securities with affiliated banks that
are primary dealers in these securities.
FUND'S RIGHTS AS A SHAREHOLDER. The fund does not intend to direct or
administer the day-to-day operations of any company. The fund, however, may
exercise its rights as a shareholder and may communicate its views on
important matters of policy to management, the Board of Directors, and
shareholders of a company when FMR determines that such matters could have
a significant effect on the value of the fund's investment in the company.
The activities that the fund may engage in, either individually or in
conjunction with others, may include, among others, supporting or opposing
proposed changes in a company's corporate structure or business activities;
seeking changes in a company's directors or management; seeking changes in
company's direction or policies; seeking the sale or reorganization of the
company or a portion of its assets; or supporting or opposing third party
takeover efforts. This area of corporate activity is increasingly prone to
litigation and it is possible that the fund could be involved in lawsuits
related to such activities. FMR will monitor such activities with a view to
mitigating, to the extent possible, the risk of litigation against the fund
and the risk of actual liability if the fund is involved in litigation. No
guarantee can be made, however, that litigation against the fund will not
be undertaken or liabilities incurred.
ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in
the ordinary course of business at approximately the prices at which they
are valued. Under the supervision of the Board of Trustees, FMR determines
the liquidity of the fund's investments and, through reports from FMR, the
Board monitors investments in illiquid instruments. In determining the
liquidity of the fund's investments, FMR may consider various factors,
including (1) the frequency of trades and quotations, (2) the number of
dealers and prospective purchasers in the marketplace, (3) dealer
undertakings to make a market, (4) the nature of the security (including
any demand or tender features) and (5) the nature of the marketplace for
trades (including the ability to assign or offset the fund's rights and
obligations relating to the investment). Investments currently considered
by the fund to be illiquid include repurchase agreements not entitling the
holder to payment of principal and interest within seven days,
over-the-counter options, and non-government stripped fixed-rate mortgage
backed securities. Also, FMR may determine some restricted securities,
government stripped fixed-rate mortgage-backed securities, loans and other
direct debt instruments, and swap agreements to be illiquid. However, with
respect to over-the-counter options the fund writes, all or a portion of
the value of the underlying instrument may be illiquid depending on the
assets held to cover the option and the nature and terms of any agreement
the fund may have to close out the option before expiration. In the absence
of market quotations, illiquid investments are priced at fair value as
determined in good faith by a committee appointed by the Board of Trustees.
If through a change in values, net assets, or other circumstances, the fund
were in a position where more than 10% of its net assets were invested in
illiquid securities, it would seek to take appropriate steps to protect
liquidity.
RESTRICTED SECURITIES generally can be sold in privately negotiated
transactions, pursuant to an exemption from registration under the
Securities Act of 1933, or in a registered public offering. Where
registration is required, the fund may be obligated to pay all or part of
the registration expense and a considerable period may elapse between the
time it decides to seek registration and the time the fund may be permitted
to sell a security under an effective registration statement. If, during
such a period, adverse market conditions were to develop, the fund might
obtain a less favorable price than prevailed when it decided to seek
registration of the security.
REPURCHASE AGREEMENTS. In a repurchase agreement, the fund purchases a
security and simultaneously commits to resell that security to the seller
at an agreed upon price on an agreed upon date within a number of days from
the date of purchase. The resale price reflects the purchase price plus an
agreed upon incremental amount which is unrelated to the coupon rate or
maturity of the purchased security. A repurchase agreement involves the
obligation of the seller to pay the agreed upon price, which obligation is
in effect secured by the value (at least equal to the amount of the agreed
upon resale price and marked to market daily) of the underlying security.
The fund may engage in a repurchase agreement with respect to any security
in which it is authorized to invest. While it does not presently appear
possible to eliminate all risks from these transactions (particularly the
possibility of a decline in the market value of the underlying securities,
as well as delays and costs to the fund in connection with bankruptcy
proceedings), it is the fund's current policy to limit repurchase agreement
transactions to parties whose creditworthiness has been reviewed and found
satisfactory by FMR.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund
sells a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase the instrument
at a particular price and time. While a reverse repurchase agreement is
outstanding, the fund will maintain appropriate liquid assets in a
segregated custodial account to cover its obligation under the agreement.
The fund will enter into reverse repurchase agreements only with parties
whose creditworthiness has been found satisfactory by FMR. Such
transactions may increase fluctuations in the market value of the fund's
assets and may be viewed as a form of leverage.
INTERFUND BORROWING PROGRAM. The fund has received permission form the SEC
to lend money to and borrow money form other funds advised by FMR or its
affiliates. Interfund loans and borrowings normally will extend overnight,
but can have a maximum duration of seven days. Loans may be called on one
day's notice. The fund will lend through the program only when the returns
are higher than those available at the same time from other short-term
instruments (such as repurchase agreements), and will borrow through the
program only when the costs are equal to or lower than the cost of bank
loans. The fund may have to borrow from a bank at a higher interest rate if
an interfund loan is called or not renewed. Any delay in repayment to a
lending fund could result in a lost investment opportunity or additional
borrowing costs.
SECURITIES LENDING. The fund may lend securities to parties such as
broker-dealers or institutional investors, including Fidelity Brokerage
Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange and
a subsidiary of FMR Corp.
Securities lending allows the fund to retain ownership of the securities
loaned and, at the same time, to earn additional income. Since there may be
delays in the recovery of loaned securities, or even a loss of rights in
collateral supplied should the borrower fail financially, loans will be
made only to parties deemed by FMR to be of good standing. Furthermore,
they will only be made if, in FMR's judgment, the consideration to be
earned from such loans would justify the risk.
FMR understands that it is the current view of the SEC Staff that the fund
may engage in loan transactions only under the following conditions: (1)
the fund must receive 100% collateral in the form of cash or cash
equivalents (e.g., U.S. Treasury bills or notes) from the borrower; (2) the
borrower must increase the collateral whenever the market value of the
securities loaned (determined on a daily basis) rises above the value of
the collateral; (3) after giving notice, the fund must be able to terminate
the loan at any time; (4) the fund must receive reasonable interest on the
loan or a flat fee from the borrower, as well as amounts equivalent to any
dividends, interest, or other distributions on the securities loaned and to
any increase in market value; (5) the fund may pay only reasonable
custodian fees in connection with the loan; and (6) the Board of Trustees
must be able to vote proxies on the securities loaned, either by
terminating the loan or by entering into an alternative arrangement with
the borrower.
Cash received through loan transactions may be invested in any security in
which the fund is authorized to invest. Investing this cash subjects that
investment, as well as the security loaned, to market forces (i.e., capital
appreciation or depreciation).
LOWER-RATED DEBT SECURITIES. The fund may purchase lower-rated debt
securities (those rated Ba or lower by Moody's Investor Services, Inc. or
BB or lower by Standard & Poor's Corporation) that have poor protection
with respect to the payment of interest and repayment of principal, or may
be in default. These securities are often considered to be speculative and
involve greater risk of loss or price changes due to changes in the
issuer's capacity to pay. The market prices of lower-rated debt securities
may fluctuate more than those of higher-rated debt securities and may
decline significantly in periods of general economic difficulty, which may
follow periods of rising interest rates.
While the market for high-yield corporate debt securities has been in
existence for many years and has weathered previous economic downturns, the
1980s brought a dramatic increase in the use of such securities to fund
highly leveraged corporate acquisitions and restructurings. Past experience
may not provide an accurate indication of future performance of the
high-yield bond market, especially during periods of economic recession. In
fact, from 1989 to 1991, the percentage of lower-rated debt securities that
defaulted rose significantly above prior levels, although the default rate
decreased in 1992.
The market for lower-rated debt securities may be thinner and less active
than that for higher-rated debt securities, which can adversely affect the
prices at which the former are sold. If market quotations are not
available, lower-rated debt securities will be valued in accordance with
procedures established by the Board of Trustees, including the use of
outside pricing services. Judgment plays a greater role in valuing high
yield corporate debt securities than is the case for securities for which
more external sources for quotations and last-sale information are
available. Adverse publicity and changing investor perceptions may affect
the ability of outside pricing services to value lower-rated debt
securities and the fund's ability to s e ll these securities.
Since the risk of default is higher for lower-rated debt securities, FMR's
research and credit analysis are an especially important part of managing
securities of this type held by the fund. In considering investments for
the fund, FMR will attempt to identify those issuers of high-yielding debt
securities whose financial condition is adequate to meet future
obligations, has improved, or is expected to improve in the future. FMR's
analysis focuses on relative values based on such factors as interest or
dividend coverage, asset coverage, earnings prospects, and the experience
and managerial strength of the issuer.
The fund may choose, at its expense or in conjunction with others, to
pursue litigation or otherwise exercise its rights as a security holder to
seek to protect the interests of security holders if it determines this to
be in the best interest of the fund's shareholders.
LOANS AND OTHER DIRECT DEBT INSTRUMENTS are interests in amounts owed by a
corporate, governmental, or other borrower to another party. They may
represent amounts owed to lenders or lending syndicates (loans and loan
participations), to suppliers of goods or services (trade claims or other
receivables), or to other parties. Direct debt instruments involve a risk
of loss in case of default or insolvency of the borrower and may offer less
legal protection to the fund in the event of fraud or
misrepresentation. In addition, loan participations involve a risk of
insolvency of the lending bank or other intermediary. Direct debt
instruments may also include standby financing commitments that obligate
the fund to supply additional cash to the borrower on demand.
SWAP AGREEMENTS. Swap agreements can be individually negotiated and
structured to include exposure to a variety of different types of
investments or market factors. Depending on their structure, swap
agreements may increase or decrease the fund's exposure to long- or
short-term interest rates (in the U.S. or abroad), foreign currency values,
mortgage securities, corporate borrowing rates, or other factors such as
security prices or inflation rates. Swap agreements can take many different
forms and are known by a variety of names. The fund is not limited to any
particular form of swap agreement if FMR determines it is consistent with
the fund's investment objective and policies.
In a typical cap or floor agreement, one party agrees to make payments only
under specified circumstances, usually in return for payment of a fee by
the other party. For example, the buyer of an interest rate cap obtains the
right to receive payments to the extent that a specified interest rate
exceeds an agreed-upon level, while the seller of an interest rate floor is
obligated to make payments to the extent that a specified interest rate
falls below an agreed-upon level. An interest rate collar combines elements
of buying a cap and selling a floor.
Swap agreements will tend to shift the fund's investment exposure from one
type of investment to another. For example, if the fund agreed to exchange
payments in dollars for payments in foreign currency, the swap agreement
would tend to decrease the fund's exposure to U.S. interest rates and
increase its exposure to foreign currency and interest rates. Caps and
floors have an effect similar to buying or writing options. Depending on
how they are used, swap agreements may increase or decrease the overall
volatility of the fund's investments and its share price.
The most significant factor in the performance of swap agreements is the
change in the specific interest rate, currency, or other factors that
determine the amounts of payments due to and from the fund. If a swap
agreement calls for payments by the fund, the fund must be prepared to make
such payments when due. In addition, if the counterparty's creditworthiness
declined, the value of a swap agreement would be likely to decline,
potentially resulting in losses. The fund expects to be able to eliminate
its exposure under swap agreements either by assignment or other
disposition, or by entering into an offsetting swap agreement with the same
party or a similarly creditworthy party.
The fund will maintain appropriate liquid assets in a segregated custodial
account to cover its current obligations under swap agreements. If the fund
enters into a swap agreement on a net basis, it will segregate assets with
a daily value at least equal to the excess, if any, of the fund's accrued
obligations under the swap agreement over the accrued amount the fund is
entitled to receive under the agreement. If the fund enters into a swap
agreement on other than a net basis, it will segregate assets with a value
equal to the full amount of the fund's accrued obligations under the
agreement.
INDEXED SECURITIES. The fund may purchase securities whose prices are
indexed to the prices of other securities, securities indices, currencies,
precious metals or other commodities, or other financial indicators.
Indexed securities typically, but not always, are debt securities or
deposits whose value at maturity or coupon rate is determined by reference
to a specific instrument or statistic. Gold-indexed securities, for
example, typically provide for a maturity value that depends on the price
of gold, resulting in a security whose price tends to rise and fall
together with gold prices. Currency-indexed securities typically are
short-term to intermediate-term debt securities whose maturity values or
interest rates are determined by reference to the values of one or more
specified foreign currencies, and may offer higher yields than U.S.
dollar-denominated securities of equivalent issuers. Currency-indexed
securities may be positively or negatively indexed; that is, their maturity
value may increase when the specified currency value increases, resulting
in a security that performs similarly to a foreign-denominated instrument,
or their maturity value may decline when foreign currencies increase,
resulting in a security whose price characteristics are similar to a put on
the underlying currency. Currency-indexed securities may also have prices
that depend on the values of a number of different foreign currencies
relative to each other.
The performance of indexed securities depends to a great extent on the
performance of the security, currency, or other instrument to which they
are indexed, and may also be influenced by interest rate changes in the
U.S. and abroad. At the same time, indexed securities are subject to the
credit risks associated with the issuer of the security, and their values
may decline substantially if the issuer's creditworthiness deteriorates.
Recent issuers of indexed securities have included banks, corporations, and
certain U.S. government agencies. Indexed securities may be more volatile
than the underlying instruments.
FOREIGN INVESTMENTS. Foreign investments can involve significant risks in
addition to the risks inherent in U.S. investments. The value of securities
denominated in or indexed to foreign currencies, and of dividends and
interest from such securities, can change significantly when foreign
currencies strengthen or weaken relative to the U.S. dollar. Foreign
securities markets generally have less trading volume and less liquidity
than U.S. markets, and prices on some foreign markets can be highly
volatile. Many foreign countries lack uniform accounting and disclosure
standards comparable to those applicable to U.S. companies, and it may be
more difficult to obtain reliable information regarding an issuer's
financial condition and operations. In addition, the costs of foreign
investing, including withholding taxes, brokerage commissions, and
custodial costs, are generally higher than for U.S. investments .
Foreign markets may offer less protection to investors than U.S. markets.
Foreign issuers, brokers, and securities markets may be subject to less
government supervision. Foreign security trading practices, including those
involving the release of assets in advance of payment, may involve
increased risks in the event of a failed trade or the insolvency of a
broker-dealer, and may involve substantial delays. It may also be difficult
to enforce legal rights in foreign countries.
Investing abroad also involves different political and economic risks.
Foreign investments may be affected by actions of foreign governments
adverse to the interests of U.S. investors, including the possibility of
expropriation or nationalization of assets, confiscatory taxation,
restrictions on U.S. investment or on the ability to repatriate assets or
convert currency into U.S. dollars, or other government intervention. There
may be a greater possibility of default by foreign governments or foreign
government-sponsored enterprises. Investments in foreign countries also
involve a risk of local political, economic, or social instability,
military action or unrest, or adverse diplomatic developments. There is no
assurance that FMR will be able to anticipate these potential events or
counter their effects.
The considerations noted above generally are intensified for investments in
developing countries. Developing countries may have relatively unstable
governments, economies based on only a few industries, and securities
markets that trade a small number of securities.
The fund may invest in foreign securities that impose restrictions on
transfer within the U.S. or to U.S. persons. Although securities subject to
such transfer restrictions may be marketable abroad, they may be less
liquid than foreign securities of the same class that are not subject to
such restrictions.
American Depositary Receipts and European Depositary Receipts (ADRs and
EDRs), are certificates evidencing ownership of shares of a foreign-based
issuer held in trust by a bank or similar financial institution. Designed
for use in the U.S. and European securities markets, respectively, ADRs and
EDRs are alternatives to the purchase of the underlying securities in their
national markets and currencies.
FOREIGN CURRENCY TRANSACTIONS. The fund may hold foreign currency deposits
from time to time, and may convert dollars and foreign currencies in the
foreign exchange markets. Currency conversion involves dealer spreads and
other costs, although commissions usually are not charged. Currencies may
be exchanged on a spot (i.e., cash) basis, or by entering into forward
contracts to purchase or sell foreign currencies at a future date and
price. Forward contracts generally are traded in an interbank market
conducted directly between currency traders (usually large commercial
banks) and their customers. The parties to a forward contract may agree to
offset or terminate the contract before its maturity, or may hold the
contract to maturity and complete the contemplated currency exchange.
The fund may use currency forward contracts to manage currency risks and to
facilitate transactions in foreign securities. The following discussion
summarizes the principal currency management strategies involving forward
contracts that could be used by the fund.
In connection with purchases and sales of securities denominated in foreign
currencies, the fund may enter into currency forward contracts to fix a
definite price for the purchase or sale in advance of the trade's
settlement date. This technique is sometimes referred to as a "settlement
hedge" or "transaction hedge." FMR expects to enter into settlement hedges
in the normal course of managing the fund's foreign investments. The fund
could also enter into forward contracts to purchase or sell a foreign
currency in anticipation of future purchases or sales of securities
denominated in foreign currency, even if the specific investments have not
yet been selected by FMR.
The fund may also use forward contracts to hedge against a decline in the
value of existing investments denominated in a foreign currency. For
example, if the fund owned securities denominated in pounds sterling, it
could enter into a forward contract to sell pounds sterling in return for
U.S. dollars to hedge against possible declines in the pound's value. Such
a hedge, sometimes referred to as a "position hedge," would tend to offset
both positive and negative currency fluctuations, but would not offset
changes in security values caused by other factors. The fund could also
hedge the position by selling another currency expected to perform
similarly to the pound sterling - for example, by entering into a forward
contract to sell Deutschemarks or European Currency Units in return for
U.S. dollars. This type of hedge, sometimes referred to as a "proxy hedge,"
could offer advantages in terms of cost, yield, or efficiency, but
generally would not hedge currency exposure as effectively as a simple
hedge into U.S. dollars. Proxy hedges may result in losses if the currency
used to hedge does not perform similarly to the currency in which the
hedged securities are denominated.
Under certain conditions, SEC guidelines require mutual funds to set aside
appropriate liquid assets in a segregated custodial account to cover
currency forward contracts. As required by SEC guidelines, the fund will
segregate assets to cover currency forward contracts, if any, whose purpose
is essentially speculative. The fund will not segregate assets to cover
forward contracts entered into for hedging purposes, including settlement
hedges, position hedges, and proxy hedges.
Successful use of forward currency contracts will depend on FMR's skill in
analyzing and predicting currency values. Forward contracts may
substantially change the fund's investment exposure to changes in currency
exchange rates, and could result in losses to the fund if currencies do not
perform as FMR anticipates. For example, if a currency's value rose at a
time when FMR had hedged the fund by selling that currency in exchange for
dollars, the fund would be unable to participate in the currency's
appreciation. If FMR hedges currency exposure through proxy hedges, the
fund could realize currency losses from the hedge and the security position
at the same time if the two currencies do not move in tandem. Similarly, if
FMR increases the fund's exposure to a foreign currency, and that
currency's value declines, the fund will realize a loss. There is no
assurance that FMR's use of forward currency contracts will be advantageous
to the fund or that it will hedge at an appropriate time. The policies
described in this section are non-fundamental policies of the fund.
SHORT SALES "AGAINST THE BOX". If the fund enters into a short sale against
the box, it will be required to set aside securities equivalent in kind and
amount to the securities sold short (or securities convertible or
exchangeable into such securities) and will be required to hold such
securities while the short sale is outstanding. The fund will insur e
transaction costs including interest expense, in connection with opening,
maintaining, and closing short sales against the box.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. The fund has filed a
notice of eligibility for exclusion from the definition of the term
"commodity pool operator" with the Commodity Futures Trading Commission
(CFTC) and the National Futures Association, which regulate trading in the
futures markets. The fund intends to comply with Section 4.5 of the
regulations under the Commodity Exchange Act, which limits the extent to
which the fund can commit assets to initial margin deposits and option
premiums.
In addition, the fund will not: (a) sell futures contracts, purchase put
options, or write call options if, as a result, more than 25% of the fund's
total assets would be hedged with futures and options under normal
conditions; (b) purchase futures contracts or write put options if, as a
result, the fund's total obligations upon settlement or exercise of
purchased futures contracts and written put options would exceed 25% of its
total assets; or (c) purchase call options if, as a result, the current
value of option premiums for call options purchased by the fund would
exceed 5% of the fund's total assets. These limitations do not apply to
options attached to or acquired or traded together with their underlying
securities, and do not apply to securities that incorporate features
similar to options.
The above limitations on the fund's investments in futures contracts and
options, and the fund's policies regarding futures contracts and options
discussed elsewhere in this Statement of Additional Information, are not
fundamental policies and may be changed as regulatory agencies permit.
FUTURES CONTRACTS. When the fund purchases a futures contract, it agrees to
purchase a specified underlying instrument at a specified future date. When
the fund sells a futures contract, it agrees to sell the underlying
instrument at a specified future date. The price at which the purchase and
sale will take place is fixed when the fund enters into the contract. Some
currently available futures contracts are based on specific securities,
such as U.S. Treasury bonds or notes, and some are based on indices of
securities prices, such as the Standard & Poor's 500 Composite Stock
Price Index (S&P 500(Registered trademark)). Futures can be held until
their delivery dates, or can be closed out before then if a liquid
secondary market is available.
The value of a futures contract tends to increase and decrease in tandem
with the value of its underlying instrument. Therefore, purchasing futures
contracts will tend to increase the fund's exposure to positive and
negative price fluctuations in the underlying instrument, much as if it had
purchased the underlying instrument directly. When the fund sells a futures
contract, by contrast, the value of its futures position will tend to move
in a direction contrary to the market. Selling futures contracts,
therefore, will tend to offset both positive and negative market price
changes, much as if the underlying instrument had been sold.
FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract is
not required to deliver or pay for the underlying instrument unless the
contract is held until the delivery date. However, both the purchaser and
seller are required to deposit "initial margin" with a futures broker,
known as a futures commission merchant (FCM), when the contract is entered
into. Initial margin deposits are typically equal to a percentage of the
contract's value. If the value of either party's position declines, that
party will be required to make additional "variation margin" payments to
settle the change in value on a daily basis. The party that has a gain may
be entitled to receive all or a portion of this amount. Initial and
variation margin payments do not constitute purchasing securities on margin
for purposes of the fund's investment limitations. In the event of the
bankruptcy of an FCM that holds margin on behalf of the fund, the fund may
be entitled to return of margin owed to it only in proportion to the amount
received by the FCM's other customers, potentially resulting in losses to
the fund.
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the fund
obtains the right (but not the obligation) to sell the option's underlying
instrument at a fixed strike price. In return for this right, the fund pays
the current market price for the option (known as the option premium).
Options have various types of underlying instruments, including specific
securities, indices of securities prices, and futures contracts. The fund
may terminate its position in a put option it has purchased by allowing it
to expire or by exercising the option. If the option is allowed to expire,
the fund will lose the entire premium it paid. If the fund exercises the
option, it completes the sale of the underlying instrument at the strike
price. The fund may also terminate a put option position by closing it out
in the secondary market at its current price, if a liquid secondary market
exists.
The buyer of a typical put option can expect to realize a gain if security
prices fall substantially. However, if the underlying instrument's price
does not fall enough to offset the cost of purchasing the option, a put
buyer can expect to suffer a loss (limited to the amount of the premium
paid, plus related transaction costs).
The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right to
purchase, rather than sell, the underlying instrument at the option's
strike price. A call buyer typically attempts to participate in potential
price increases of the underlying instrument with risk limited to the cost
of the option if security prices fall. At the same time, the buyer can
expect to suffer a loss if security prices do not rise sufficiently to
offset the cost of the option.
WRITING PUT AND CALL OPTIONS. When the fund writes a put option, it takes
the opposite side of the transaction from the option's purchaser. In return
for receipt of the premium, the fund assumes the obligation to pay the
strike price for the option's underlying instrument if the other party to
the option chooses to exercise it. When writing an option on a futures
contract the fund will be required to make margin payments to an FCM as
described above for futures contracts. The fund may seek to terminate its
position in a put option it writes before exercise by closing out the
option in the secondary market at its current price. If the secondary
market is not liquid for a put option the fund has written, however, the
fund must continue to be prepared to pay the strike price while the option
is outstanding, regardless of price changes, and must continue to set aside
assets to cover its position.
If security prices rise, a put writer would generally expect to profit,
although its gain would be limited to the amount of the premium it
received. If security prices remain the same over time, it is likely that
the writer will also profit, because it should be able to close out the
option at a lower price. If security prices fall, the put writer would
expect to suffer a loss. This loss should be less than the loss from
purchasing the underlying instrument directly, however, because the premium
received for writing the option should mitigate the effects of the decline.
Writing a call option obligates the fund to sell or deliver the option's
underlying instrument, in return for the strike price, upon exercise of the
option. The characteristics of writing call options are similar to those of
writing put options, except that writing calls generally is a profitable
strategy if prices remain the same or fall. Through receipt of the option
premium, a call writer mitigates the effects of a price decline. At the
same time, because a call writer must be prepared to deliver the underlying
instrument in return for the strike price, even if its current value is
greater, a call writer gives up some ability to participate in security
price increases.
COMBINED POSITIONS. The fund may purchase and write options in combination
with each other, or in combination with futures or forward contracts, to
adjust the risk and return characteristics of the overall position. For
example, the fund may purchase a put option and write a call option on the
same underlying instrument, in order to construct a combined position whose
risk and return characteristics are similar to selling a futures contract.
Another possible combined position would involve writing a call option at
one strike price and buying a call option at a lower price, in order to
reduce the risk of the written call option in the event of a substantial
price increase. Because combined options positions involve multiple trades,
they result in higher transaction costs and may be more difficult to open
and close out.
CORRELATION OF PRICE CHANGES. Because there are a limited number of types
of exchange-traded options and futures contracts, it is likely that the
standardized contracts available will not match the fund's current or
anticipated investments exactly. The fund may invest in options and futures
contracts based on securities with different issuers, maturities, or other
characteristics from the securities in which it typically invests, which
involves a risk that the options or futures position will not track the
performance of the fund's other investments.
Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match the fund's
investments well. Options and futures prices are affected by such factors
as current and anticipated short-term interest rates, changes in volatility
of the underlying instrument, and the time remaining until expiration of
the contract, which may not affect security prices the same way. Imperfect
correlation may also result from differing levels of demand in the options
and futures markets and the securities markets, from structural differences
in how options and futures and securities are traded, or from imposition of
daily price fluctuation limits or trading halts. The fund may purchase or
sell options and futures contracts with a greater or lesser value than the
securities it wishes to hedge or intends to purchase in order to attempt to
compensate for differences in volatility between the contract and the
securities, although this may not be successful in all cases. If price
changes in the fund's options or futures positions are poorly correlated
with its other investments, the positions may fail to produce anticipated
gains or result in losses that are not offset by gains in other
investments.
LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a liquid
secondary market will exist for any particular options or futures contract
at any particular time. Options may have relatively low trading volume and
liquidity if their strike prices are not close to the underlying
instrument's current price. In addition, exchanges may establish daily
price fluctuation limits for options and futures contracts, and may halt
trading if a contract's price moves upward or downward more than the limit
in a given day. On volatile trading days when the price fluctuation limit
is reached or a trading halt is imposed, it may be impossible for the fund
to enter into new positions or close out existing positions. If the
secondary market for a contract is not liquid because of price fluctuation
limits or otherwise, it could prevent prompt liquidation of unfavorable
positions, and potentially could require the fund to continue to hold a
position until delivery or expiration regardless of changes in its value.
As a result, the fund's access to other assets held to cover its options or
futures positions could also be impaired.
OTC OPTIONS. Unlike exchange-traded options, which are standardized with
respect to the underlying instrument, expiration date, contract size, and
strike price, the terms of over-the-counter options (options not traded on
exchanges) generally are established through negotiation with the other
party to the option contract. While this type of arrangement allows the
fund greater flexibility to tailor an option to its needs, OTC options
generally involve greater credit risk than exchange-traded options, which
are guaranteed by the clearing organization of the exchanges where they are
traded.
OPTIONS AND FUTURES RELATING TO FOREIGN CURRENCIES. Currency futures
contracts are similar to forward currency exchange contracts, except that
they are traded on exchanges (and have margin requirements) and are
standardized as to contract size and delivery date. Most currency futures
contracts call for payment or delivery in U.S. dollars. The underlying
instrument of a currency option may be a foreign currency, which generally
is purchased or delivered in exchange for U.S. dollars, or may be a futures
contract. The purchaser of a currency call obtains the right to purchase
the underlying currency, and the purchaser of a currency put obtains the
right to sell the underlying currency.
The uses and risks of currency options and futures are similar to options
and futures relating to securities or indices, as discussed above. The fund
may purchase and sell currency futures and may purchase and write currency
options to increase or decrease its exposure to different foreign
currencies. The fund may also purchase and write currency options in
conjunction with each other or with currency futures or forward contracts.
Currency futures and options values can be expected to correlate with
exchange rates, but may not reflect other factors that affect the value of
the fund's investments. A currency hedge, for example, should protect a
Yen-denominated security from a decline in the Yen, but will not protect
the fund against a price decline resulting from deterioration in the
issuer's creditworthiness. Because the value of the fund's
foreign-denominated investments changes in response to many factors other
than exchange rates, it may not be possible to match the amount of currency
options and futures to the value of the fund's investments exactly over
time.
ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS. The fund will comply
with guidelines established by the Securities and Exchange Commission with
respect to coverage of options and futures strategies by mutual funds, and
if the guidelines so require will set aside appropriate liquid assets in a
segregated custodial account in the amount prescribed. Securities held in a
segregated account cannot be sold while the futures or option strategy is
outstanding, unless they are replaced with other suitable assets. As a
result, there is a possibility that segregation of a large percentage of
the fund's assets could impede portfolio management or the fund's ability
to meet redemption requests or other current obligations.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of the fund by FMR pursuant to authority contained in the management
contract. FMR is also responsible for the placement of transaction orders
for other investment companies and accounts for which it or its affiliates
act as investment adviser. In selecting broker-dealers, subject to
applicable limitations of the federal securities laws, FMR considers
various relevant factors, including, but not limited to, the size and type
of the transaction; the nature and character of the markets for the
security to be purchased or sold; the execution efficiency, settlement
capability, and financial condition of the broker-dealer firm; the
broker-dealer's execution services rendered on a continuing basis; the
reasonableness of any commissions; and arrangements for payment of fund
expenses. Commissions for foreign investments traded on foreign exchanges
generally will be higher than for U.S. investments and may not be subject
to negotiation.
The fund may execute portfolio transactions with broker-dealers who provide
research and execution services to the fund or other accounts over which
FMR or its affiliates exercise investment discretion. Such services may
include advice concerning the value of securities; the advisability of
investing in, purchasing or selling securities; the availability of
securities or the purchasers or sellers of securities; furnishing analyses
and reports concerning issuers, industries, securities, economic factors
and trends, portfolio strategy, and performance of accounts; and effecting
securities transactions and performing functions incidental thereto (such
as clearance and settlement). The selection of such broker-dealers
generally is made by FMR (to the extent possible consistent with execution
considerations) in accordance with a ranking of broker-dealers determined
periodically by FMR's investment staff based upon the quality of research
and execution services provided.
The receipt of research from broker-dealers that execute transactions on
behalf of the fund may be useful to FMR in rendering investment management
services to the fund or its other clients, and conversely, such research
provided by broker-dealers who have executed transaction orders on behalf
of other FMR clients may be useful to FMR in carrying out its obligations
to the fund. The receipt of such research has not reduced FMR's normal
independent research activities; however, it enables FMR to avoid the
additional expenses that could be incurred if FMR tried to develop
comparable information through its own efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause the
fund to pay such higher commissions, FMR must determine in good faith that
such commissions are reasonable in relation to the value of the brokerage
and research services provided by such executing broker-dealers, viewed in
terms of a particular transaction or FMR's overall responsibilities to the
fund and its other clients. In reaching this determination, FMR will not
attempt to place a specific dollar value on the brokerage and research
services provided or to determine what portion of the compensation should
be related to those services.
FMR is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided assistance
in the distribution of shares of the fund or shares of other Fidelity funds
to the extent permitted by law. FMR may use research services provided by
and place agency transactions with Fidelity Brokerage Services, Inc. (FBSI)
and Fidelity Brokerage Services, Ltd. (FBSL), subsidiaries of FMR Corp., if
the commissions are fair, reasonable, and comparable to commissions charged
by non-affiliated, qualified brokerage firms for similar services. Prior to
September 4, 1992, FBSL operated under the name Fidelity Portfolio
Services, Ltd. (FPSL) as a wholly owned subsidiary of Fidelity
International Limited (FIL). Edward C. Johnson 3d is Chairman of FIL. Mr.
Johnson 3d, Johnson family members, and various trusts for the benefit of
the Johnson family, own directly or indirectly more than 25% of the
voting common stock of FIL.
FMR may allocate brokerage transactions to broker-dealers who have entered
into arrangements with FMR under which the broker-dealer allocates a
portion of the commissions paid by the fund toward payment of the fund's
expenses, such as transfer agent fees of FSC or custodian fees. The
transaction quality must, however, be comparable to those of other
qualified broker-dealers.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members of
national securities exchanges from executing exchange transactions for
accounts which they or their affiliates manage, except in accordance with
regulations of the SEC. Pursuant to such regulations, the Board of Trustees
has approved a written agreement that permits FBSI to effect portfolio
transactions on national securities exchanges and to retain compensation in
connection with such transactions.
The Trustees periodically review FMR's performance of its responsibilities
in connection with the placement of portfolio transactions on behalf of the
fund and review the commissions paid by the fund over representative
periods of time to determine if they are reasonable in relation to the
benefits to the fund. For the fiscal years ended December 31, 1993 and
1992, the fund's portfolio turnover rate amounted to 255 % and 297%,
respectively.
For fiscal 1993, 1992, and 1991, the fund paid brokerage commissions of
$20,497,000, $7,811,003, and $3,615,997, respectively. During fiscal 1993,
approximately $ 12,665,000 or 61.8 % of these commissions were
paid to brokerage firms which provided research services, although the
providing of such services was not necessarily a factor in the placement of
all of this business with such firms. The fund pays both commissions and
spreads in connection with the placement of portfolio transactions; FBSI is
paid on a commission basis. During fiscal 1993, 1992, and 1991, the fund
paid brokerage commissions of $ 6,592,000 , $2,363,561, and
$1,170,899, respectively, to FBSI. During fiscal 1993, this amounted to
32.2 % of the aggregate brokerage commissions paid by the fund for
transactions involving 45.8% of the aggregate dollar amount of transactions
in which the fund paid brokerage commissions. The difference in the
percentage of the brokerage commissions paid to and the percentage of the
dollar amount of transactions effected through FBSI is a result of the
lower commission rates charged by FBSI. During fiscal 1993, 1992, and
1991, the fund paid FBSL brokerage commissions of $0, $4,231, and $240,
respectively.
From time to time the Trustees will review whether the recapture for the
benefit of the fund of some portion of the brokerage commissions or similar
fees paid by the fund on portfolio transactions is legally permissible and
advisable. The fund seeks to recapture soliciting broker-dealer fees on the
tender of portfolio securities, but at present no other recapture
arrangements are in effect. The Trustees intend to continue to review
whether recapture opportunities are available and are legally permissible
and, if so, to determine in the exercise of their business judgment,
whether it would be advisable for the fund to seek such recapture.
Although the Trustees and officers of the fund are substantially the same
as those of other funds managed by FMR, investment decisions for the fund
are made independently from those of other funds managed by FMR or accounts
managed by FMR affiliates. It sometimes happens that the same security is
held in the portfolio of more than one of these funds or accounts.
Simultaneous transactions are inevitable when several funds are managed by
the same investment adviser, particularly when the same security is
suitable for the investment objective of more than one fund.
When two or more funds are simultaneously engaged in the purchase or sale
of the same security, the prices and amounts are allocated in accordance
with a formula considered by the officers of the funds involved to be
equitable to each fund. In some cases this system could have a detrimental
effect on the price or value of the security as far as the fund is
concerned. In other cases, however, the ability of the fund to participate
in volume transactions will produce better executions and prices for the
fund. It is the current opinion of the Trustees that the desirability of
retaining FMR as investment adviser to the fund outweighs any disadvantages
that may be said to exist from exposure to simultaneous transactions.
VALUATION OF PORTFOLIO SECURITIES
Portfolio securities are valued by various methods depending on the primary
market or exchange on which they trade. Equity securities for which the
primary market is the U.S. are valued at last sale price or, if no sale has
occurred, at the closing bid price. Equity securities for which the primary
market is outside the U.S. are valued using the official closing price or
the last sale price in the principal market where they are traded. If the
last sale price (on the local exchange) is unavailable, the last evaluated
quote or last bid price is normally used. Short-term securities are valued
either at amortized cost or at original cost plus accrued interest, both of
which approximate current value. Fixed-income securities are valued
primarily by a pricing service that uses a vendor security valuation matrix
which incorporates both dealer-supplied valuations and electronic data
processing techniques. This twofold approach is believed to more accurately
reflect fair value because it takes into account appropriate factors such
as institutional trading in similar groups of securities, yield, quality,
coupon rate, maturity, type of issue, trading characteristics, and other
market data, without exclusive reliance upon quoted, exchange, or
over-the - counter prices. Use of pricing services has been approved
by the Board of Trustees.
Securities and other assets for which there is no readily available market
are valued in good faith by a committee appointed by the Board of Trustees.
The procedures set forth above need not be used to determine the value of
the securities owned by the fund if, in the opinion of a committee
appointed by the Board of Trustees, some other method (e.g., closing
over-the-counter bid prices in the case of debt instruments traded on an
exchange) would more accurately reflect the fair market value of such
securities.
Generally, the valuation of foreign and domestic equity securities, as well
as corporate bonds, U.S. government securities, money market instruments,
and repurchase agreements, is substantially completed each day at the close
of the NYSE. The values of any such securities held by the fund are
determined as of such time for the purpose of computing the fund's net
asset value. Foreign security prices are furnished by independent brokers
or quotation services which express the value of securities in their local
currency. FSC gathers all exchange rates daily at the close of the NYSE
using the last quoted price on the local currency and then translates the
value of foreign securities from their local currency into U.S. dollars.
Any changes in the value of forward contracts due to exchange rate
fluctuations and days to maturity are included in the calculation of net
asset value. If an extraordinary event that is expected to materially
affect the value of a portfolio security occurs after the close of an
exchange on which that security is traded, then the security will be valued
as determined in good faith by a committee appointed by the Board of
Trustees.
PERFORMANCE
The fund may quote its performance in various ways. All performance
information supplied by the fund in advertising is historical and is not
intended to indicate future returns. The fund's share price and
total returns fluctuate in response to market conditions and other factors,
and the value of fund shares, when redeemed, may be more or less than their
original cost.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all
aspects of the fund's return, including the effect of reinvesting dividends
and capital gain distributions, and any change in the fund's NAV over the
period. Average annual returns are calculated by determining the growth or
decline in value of a hypothetical historical investment in the fund over a
stated period, and then calculating the annually compounded percentage rate
that would have produced the same result if the rate of growth or decline
in value had been constant over the period. For example, a cumulative
return of 100% over ten years would produce an average annual return of
7.18%, which is the steady annual rate of return that would equal 100%
growth on a compounded basis in ten years. While average annual returns are
a convenient means of comparing investment alternatives, investors should
realize that the fund's performance is not constant over time, but changes
from year to year, and that average annual returns represent averaged
figures as opposed to the actual year-to-year performance of the fund.
In addition to average annual returns, the fund may quote unaveraged or
cumulative total returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative total
returns may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, or a series of
redemptions, over any time period. Total returns may be broken down into
their components of income and capital (including capital gains and changes
in share price) in order to illustrate the relationship of these factors
and their contributions to total return. An example of this type of
illustration is given on page 11 . Total returns and other
performance information may be quoted numerically or in a table, graph, or
similar illustration.
NET ASSET VALUE. Charts and graphs using the fund's net asset values,
adjusted net asset values, and benchmark indices may be used to exhibit
performance. An adjusted NAV includes any distributions paid by the fund
and reflects all elements of its return. Unless otherwise indicated, the
fund's adjusted NAVs are not adjusted for sales charges, if any.
MOVING AVERAGES. The f und may illustrate performance using moving
averages. A long-term moving average is the average of each week's adjusted
closing NAV for a specified period. A short-term moving average is the
average of each day's adjusted closing NAV for a specified period. Moving
Average Activity Indicators combine adjusted closing NAVs from the last
business day of each week with moving averages for a specified period to
produce indicators showing when an NAV has crossed, stayed above, or stayed
below its moving average. On December 31, 1993, the 13-week and 39-week
long-term moving averages were 30.57 and 29.57 , respectively.
HISTORICAL FUND RESULTS. The following table shows the income and capital
elements of the fund's total return for the period December 31, 1983 to
December 31, 1993 . The table compares the fund's return to the record
of the S&P 500, the Dow Jones Industrial Average (DJIA), and the cost
of living (measured by the Consumer Price Index, or CPI) over the same
period. The S&P 500 and DJIA comparisons are provided to show how the
fund's total return compared to the record of a broad average of common
stock prices and a narrower set of stocks of major industrial companies,
respectively, over the same period. The fund has the ability to invest in
securities not included in either index, and its investment portfolio may
or may not be similar in composition to the indices. The S&P 500 and
DJIA are based on the prices of unmanaged groups of stocks, and unlike the
fund's returns, their returns do not include the effect of paying brokerage
commissions and other costs of investing.
During the period from December 31, 1983 through December 31, 1993,
a hypothetical $10,000 investment in Fidelity Contrafund would have grown
to $ 49,336 , assuming all distributions were reinvested and
including the effect of the fund 3% sales charge . This was a period of
widely fluctuating stock prices and should not be considered representative
of the dividend income or capital gain or loss that could be realized from
an investment in the fund today.
FIDELITY CONTRAFUND INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Value of Value of Value of
Initial Reinvested Reinvested
Years Ended $10,000 Income Capital Gain Total Cost of
December 31 Investment Distributions Distributions Value S&P DJIA Living
500
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
1993 $ 23,499 $ 4,585 $ 21,251 $ 49,336 $40,235 $ 42,918 $14,393
1992 20, 932 3,839 15,860 40,630 36,551 36,670 14,008
1991 19,507 3,314 12,238 35,058 33,955 34,176 13,613
1990 13,220 2,140 7,270 22,630 26,023 27,486 13,208
1989 12,786 1,956 7,031 21,773 26,860 27,634 12,448
1988 9,639 1,246 4,324 15,210 20,397 20,973 11,895
1987 8,168 735 3,665 12,568 17,492 18,092 11,392
1986 8,603 774 3,435 12,811 16,617 17,160 10,908
1985 9,266 559 1,481 11,306 14,002 13,508 10,790
1984 7,445 263 1,190 8,898 10,627 10,114 10,395
</TABLE>
Explanatory Notes: With an initial investment of $10,000 made on December
31, 1983, the net amount invested in fund shares was $9,700 ( assuming the
fund's 3% sales charge had been in effect at that time). The cost of the
initial investment ($10,000), together with the aggregate cost of
reinvested dividends and capital gain distributions for the period covered
(their cash value at the time they were reinvested), amounted to
$ 24,789 . If distributions had not been reinvested, the amount of
distributions earned from the fund over time would have been smaller, and
the cash payments for the period would have amounted to $ 1,478 for
income dividends and $ 8,054 for capital gain distributions. Tax
consequences of different investments have not been factored into the above
figures.
The fund's performance may be compared to the performance of other mutual
funds in general, or to the performance of particular types of mutual
funds. These comparisons may be expressed as mutual fund rankings prepared
by Lipper Analytical Services, Inc. (Lipper), an independent service
located in Summit, New Jersey that monitors the performance of mutual
funds. Lipper generally ranks funds on the basis of total return, assuming
reinvestment of distributions, but does not take sales charges or
redemption fees into consideration, and is prepared without regard to tax
consequences. In addition to the mutual fund rankings, the fund's
performance may be compared to mutual fund performance indices prepared by
Lipper.
From time to time, the fund's performance may also be compared to other
mutual funds tracked by financial or business publications and periodicals.
For example, the fund may quote Morningstar, Inc. in its advertising
materials. Morningstar, Inc. is a mutual fund rating service that rates
mutual funds on the basis of risk-adjusted performance. Rankings that
compare the performance of Fidelity funds to one another in appropriate
categories over specific periods of time may also be quoted in advertising.
Fidelity may provide information designed to help individuals understand
their investment goals and explore various financial strategies. For
example, Fidelity's FundMatchsm Program includes a workbook describing
general principles of investing, such as asset allocation, diversification,
risk tolerance, and goal setting; a questionnaire designed to help create a
personal financial profile; and an action plan offering investment
alternatives. Materials may also include discussions of Fidelity's three
asset allocation funds and other Fidelity funds, products, and services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical
returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the CPI), and combinations of
various capital markets. The performance of these capital markets is based
on the returns of different indices.
Fidelity funds may use the performance of these capital markets in order
to demonstrate general risk-versus-reward investment scenarios. Performance
comparisons may also include the value of a hypothetical investment in any
of these capital markets. The risks associated with the security types in
any capital market may or may not correspond directly to those of the
funds. Ibbotson calculates total returns in the same method as the funds.
The funds may also compare performance to that of other compilations or
indices that may be developed and made available in the future.
In advertising materials, Fidelity may reference or discuss its products
and services, which may include: other Fidelity funds; retirement
investing; brokerage products and services; the effects of periodic
investment plans and dollar cost averaging; saving for college; charitable
giving; and the Fidelity credit card. In addition, Fidelity may quote
financial or business publications and periodicals, including model
portfolios or allocations, as they relate to fund management, investment
philosophy, and investment techniques. Fidelity may also reprint, and use
as advertising and sales literature, articles from Fidelity Focus, a
quarterly magazine provided free of charge to Fidelity fund shareholders.
The fund may present its fund number, Quotron(REGISTERED TRADEMARK)
number, and CUSIP number, and discuss or quote its current portfolio
manager.
VOLATILITY. The fund may quote various measures of volatility and
benchmark correlation in advertising. In addition, the fund may compare
these measures to those of other funds. Measures of volatility seek to
compare the fund's historical share price fluctuations or total returns to
those of a benchmark. Measures of benchmark correlation indicate how valid
a comparative benchmark may be. All measures of volatility and correlation
are calculated using averages of historical data.
MOMENTUM INDICATORS indicate the fund's price movements over specific
periods of time. Each point on the momentum indicator represents the fund's
percentage change in price movements over that period.
The fund may advertise examples of the effects of periodic investment
plans, including the principle of dollar cost averaging. In such a program,
an investor invests a fixed dollar amount in a fund at periodic intervals,
thereby purchasing fewer shares when prices are high and more shares when
prices are low. While such a strategy does not assure a profit or guard
against loss in a declining market, the investor's average cost per share
can be lower than if fixed numbers of shares are purchased at the same
intervals. In evaluating such a plan, investors should consider their
ability to continue purchasing shares during periods of low price levels.
The fund may be available for purchase through retirement plans or other
programs offering deferral of, or exemption from, income taxes, which may
produce superior after-tax returns over time. For example, a $1,000
investment earning a taxable return of 10% annually would have an after-tax
value of $1,949 after ten years, assuming tax was deducted from the return
each year at a 31% rate. An equivalent tax-deferred investment would have
an after-tax value of $2,100 after ten years, assuming tax was deducted at
a 31% rate from the tax-deferred earnings at the end of the ten-year
period.
As of December 31, 1993, FMR managed approximately $130 billion in
equity fund assets as defined and tracked by Lipper. This figure represents
the largest amount of equity fund assets under management by a mutual fund
investment advisor in the United States, making FMR America's leading
equity (stock) fund manager. From time to time, the fund may use this
information in its advertising and sales literature.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
As provided for in Rule 22d-1 under the Investment Company Act of 1940 (the
1940 Act), FDC exercises its right to waive the fund's 3% sales charge or
shares acquired through reinvestment of dividends and capital gain
distributions or in connection with the fund's merger with or acquisition
of any investment company or trust.
In addition, the fund's sales charge will not apply (1) if you buy shares
as part of an employee benefit plan (including the Fidelity-sponsored
403(b) and corporate IRA programs but otherwise as defined in the Employee
Retirement Income Security Act) maintained by a U.S. employer and having
more than 200 eligible employees, or a minimum of $3,000,000 in plan assets
invested in Fidelity mutual funds, or as part of an employee benefit plan
maintained by a U.S. employer that is a member of a parent-subsidiary group
of corporations (within the meaning of Section 1563(a)(1) of the Internal
Revenue Code, with "50%" substituted for "80%") any member of which
maintains an employee benefit plan having more than 200 eligible employees,
or a minimum of $3,000,000 in plan assets invested in Fidelity mutual
funds, or as part of an employee benefit plan maintained by a non-U.S.
employer having 200 or more eligible employees, or a minimum of $3,000,000
in assets invested in Fidelity mutual funds, the assets of which are held
in a bona fide trust for the exclusive benefit of employees participating
therein; (2) to shares purchased by an insurance company separate account
used to fund annuity contracts purchased by employee benefit plans
(including 403(b) programs, but otherwise as defined in the Employee
Retirement Income Security Act), which, in the aggregate, have either more
than 200 eligible employees or a minimum of $3,000,000 in assets invested
in Fidelity funds; (3) to shares in a Fidelity IRA account purchased
(including purchases by exchange) with the proceeds of a distribution from
an employee benefit plan provided that: (i) at the time of the
distribution, the employer, or an affiliate (as described in exemption (1)
above) of such employer, maintained at least one employee benefit plan that
qualified for exemption (1) and that had at least some portion of its
assets invested in one or more mutual funds advised by FMR, or in one or
more accounts or pools advised by Fidelity Management Trust Company; and
(ii) the distribution is transferred from the plan to a Fidelity Rollover
IRA account within 60 days from the date of the distribution; (4) if you
are a charitable organization (as defined in Section 501(c)(3) of the
Internal Revenue Code) investing $100,000 or more; (5) if you purchase
shares for a charitable remainder trust or life income pool established for
the benefit of a charitable organization (as defined by Section 501(c)(3)
of the Internal Revenue Code); (6) if you are an investor participating in
the Fidelity Trust Portfolios program (these investors must make initial
investments of $100,000 or more in the Trust Portfolios funds and must,
during the initial six-month period, reach and maintain an aggregate
balance of at least $500,000 in all accounts and subaccounts purchased
through the Trust Portfolios program); (7) to shares purchased through
Portfolio Advisory Services; (8) if you are a current or former Trustee or
officer of a Fidelity fund or a current or retired officer, director, or
full-time employee of FMR Corp. or its direct or indirect subsidiaries (a
Fidelity Trustee or employee), the spouse of a Fidelity Trustee or
employee, a Fidelity Trustee or employee acting as custodian for a minor
child, or a person acting as trustee of a trust for the sole benefit of the
minor child of a Fidelity Trustee or employee; (9) if you are a bank trust
officer, registered representative, or other employee of a Qualified
Recipient. Qualified Recipients are securities dealers or other entities,
including banks and other financial institutions, who have sold the fund's
shares under special arrangements in connection with FDC's sales
activities; or (10) to shares purchased by contributions and exchanges to
the following prototype or prototype-like retirement plans sponsored by FMR
Corp. or FMR and that are marketed and distributed directly to plan
sponsors or participants without any intervention or assistance from any
intermediary distribution channel: The Fidelity IRA, the Fidelity Rollover
IRA, The Fidelity SEP-IRA and SARSEP, The Fidelity Retirement Plan,
Fidelity Defined Benefit Plan, The Fidelity Group IRA, The Fidelity 403(b)
Program, The Fidelity Investments 401(a) Prototype Plan for Tax-Exempt
Employers, and The CORPORATEplan for Retirement (Profit Sharing and Money
Purchase Plan). FDC has chosen to waive the fund's sales charge in these
instances because of efficiencies involved in sales of shares to these
investors.
The fund's sales charge may be reduced to reflect sales charges
previously paid, or that would have been paid absent a reduction as noted
in the prospectus, in connection with investments in other Fidelity funds.
This includes reductions for investments in prototype-like retirement plans
sponsored by FMR or FMR Corp., which are listed above.
The fund is open for business and its net asset value per share (NAV) is
calculated each day the New York Stock Exchange (NYSE) is open for trading.
The NYSE has designated the following holiday closings for 1994:
Washington's Birthday (observed), Good Friday, Memorial Day (observed),
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day
(observed). Although FMR expects the same holiday schedule, with the
addition of New Year's Day, to be observed in the future, the NYSE may
modify its holiday schedule at any time.
FSC normally determines the fund's NAV as of the close of the NYSE
(normally 4:00 p.m. Eastern time). However, NAV may be calculated earlier
if trading on the NYSE is restricted or as permitted by the SEC. To the
extent that portfolio securities are traded in other markets on days when
the NYSE is closed, the fund's NAV may be affected on days when investors
do not have access to the fund to purchase or redeem shares.
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are valued in
computing the fund's NAV. Shareholders receiving securities or other
property on redemption may realize a gain or loss for tax purposes, and
will incur any costs of sale, as well as the associated inconveniences.
Pursuant to Rule 11a-3 under the 1940 Act, the fund is required to
give shareholders at least 60 days' notice prior to terminating or
modifying its exchange privilege. Under the Rule, the 60-day notification
requirement may be waived if (i) the only effect of a modification would be
to reduce or eliminate an administrative fee, redemption fee, or deferred
sales charge ordinarily payable at the time of an exchange, or (ii) the
fund suspends the redemption of the shares to be exchanged as permitted
under the 1940 Act or the rules and regulations thereunder, or the fund to
be acquired suspends the sale of its shares because it is unable to invest
amounts effectively in accordance with its investment objective and
policies.
In the Prospectus, the fund has notified shareholders that it reserves the
right at any time, without prior notice, to refuse exchange purchases by
any person or group if, in FMR's judgment, the fund would be unable to
invest effectively in accordance with its investment objective and
policies, or would otherwise potentially be adversely affected.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. If you request to have distributions mailed to you and the
U.S. Postal Service cannot deliver your checks, or if your checks remain
uncashed for six months, Fidelity may reinvest your distributions at the
then-current NAV. All subsequent distributions will then be reinvested
until you provide Fidelity with alternate instructions.
DIVIDENDS. A portion of the fund's income may qualify for the
dividends-received deduction available to corporate shareholders to the
extent that the fund's income is derived from qualifying dividends. Because
the fund may earn other types of income, such as interest, income from
securities loans, non-qualifying dividends, and short-term capital gains,
the percentage of dividends from the fund that qualifies for the deduction
generally will be less than 100%. The fund will notify corporate
shareholders annually of the percentage of fund dividends that qualifies
for the dividends-received deduction. A portion of the fund's dividends
derived from certain U.S. government obligations may be exempt from state
and local taxation. Gains (losses) attributable to foreign currency
fluctuations are generally taxable as ordinary income, and therefore will
increase (decrease) dividend distributions. The fund will send each
shareholder a notice in January describing the tax status of dividends and
capital gain distributions for the prior year.
CAPITAL GAIN DISTRIBUTIONS. Long-term capital gains earned by the fund on
the sale of securities and distributed to shareholders are federally
taxable as long-term capital gains regardless of the length of time
shareholders have held their shares. If a shareholder receives a long-term
capital gain distribution on shares of the fund and such shares are held
six months or less and are sold at a loss, the portion of the loss equal to
the amount of the long-term capital gain distribution will be considered a
long-term loss for tax purposes.
Short-term capital gains distributed by the fund are taxable to
shareholders as dividends, not as capital gains. Distributions from
short-term capital gains do not qualify for the dividends-received
deduction.
FOREIGN TAXES. Foreign governments may withhold taxes on dividends and
interest paid with respect to foreign securities. Because the fund does not
currently anticipate that securities of foreign issuers will constitute
more than 50% of its total assets at the end of its fiscal year,
shareholders should not expect to claim a foreign tax credit or deduction
on their federal income tax returns with respect to foreign taxes withheld.
TAX STATUS OF THE FUND. The fund has qualified and intends to continue to
qualify each year as a "regulated investment company" for tax purposes so
that it will not be liable for federal tax on income and capital gains
distributed to shareholders. In order to qualify as a regulated investment
company and avoid being subject to federal income or excise taxes at the
fund level, the fund intends to distribute substantially all of its net
investment income and net realized capital gains within each calendar year
as well as on a fiscal year basis. The fund intends to comply with other
tax rules applicable to regulated investment companies, including a
requirement that capital gains from the sale of securities held less than
three months constitute less than 30% of the fund's gross income for each
fiscal year. Gains from some forward currency contracts, futures contracts,
and options are included in this 30% calculation, which may limit the
fund's investments in such instruments.
If the fund purchases shares in certain foreign investment entities,
defined as passive foreign investment companies (PFICs) in the Internal
Revenue Code, it may be subject to U.S. federal income tax on a portion of
any excess distribution or gain from the disposition of such shares.
Interest charges may also be imposed on the fund with respect to deferred
taxes arising from such distributions or gains.
OTHER TAX INFORMATION. The information above is only a summary of some of
the tax consequences generally affecting the fund and its shareholders, and
no attempt has been made to discuss individual tax consequences. In
addition to federal income taxes, shareholders may be subject to state and
local taxes on distributions received from the fund. Investors should
consult their tax advisers to determine whether the fund is suitable to
their particular tax situation.
FMR
FMR is a wholly owned subsidiary of FMR Corp., a parent company organized
in 1972. At present, the principal operating activities of FMR Corp. are
those conducted by three of its divisions as follows: FSC, which is the
transfer and shareholder servicing agent for certain of the funds advised
by FMR; Fidelity Investments Institutional Operations Company, which
performs shareholder servicing functions for certain institutional
customers; and Fidelity Investments Retail Marketing Company, which
provides marketing services to various companies within the Fidelity
organization.
Several affiliates of FMR are also engaged in the investment advisory
business. Fidelity Management Trust Company provides trustee, investment
advisory, and administrative services to retirement plans and corporate
employee benefit accounts. FMR U.K. and FMR Far East, both wholly owned
subsidiaries of FMR formed in 1986, supply investment research, and may
supply portfolio management services, to FMR in connection with certain
funds advised by FMR. Analysts employed by FMR, FMR U.K., and FMR Far East
research and visit thousands of domestic and foreign companies each year.
FMR Texas Inc., a wholly owned subsidiary of FMR formed in 1989, supplies
portfolio management and research services in connection with certain money
market funds advised by FMR.
TRUSTEES AND OFFICERS
The Trustees and executive officers of the trust are listed below. Except
as indicated, each individual has held the office shown or other offices in
the same company for the last five years. All persons named as Trustees
also serve in similar capacities for other funds advised by FMR. Unless
otherwise noted, the business address of each Trustee and officer is 82
Devonshire Street, Boston, Massachusetts 02109, which is also the address
of FMR. Those Trustees who are "interested persons" (as defined in the 1940
Act) by virtue of their affiliation with either the Trust or FMR are
indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d, Trustee and President, is Chairman, Chief Executive
Officer and a Director of FMR Corp.; a Director and Chairman of the Board
and of the Executive Committee of FMR; Chairman and a Director of FMR Texas
Inc. (1989), Fidelity Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
*J. GARY BURKHEAD, Trustee and Senior Vice President, is President of FMR;
and President and a Director of FMR Texas Inc. (1989), Fidelity Management
& Research (U.K.) Inc. , and Fidelity Management & Research
(Far East) Inc.
RALPH F. COX, 200 Rivercrest Drive, Fort Worth, TX, Trustee (1991), is
President of Greenhill Petroleum Corporation (petroleum exploration and
production, 1990). Prior to his retirement in March 1990, Mr. Cox was
President and Chief Operating Officer of Union Pacific Resources Company
(exploration and production). He is a Director of Bonneville Pacific
Corporation (independent power, 1989) and CH2M Hill Companies
(engineering). In addition, he served on the Board of Directors of the
Norton Company (manufacturer of industrial devices, 1983-1990) and
continues to serve on the Board of Directors of the Texas State Chamber of
Commerce, and is a member of advisory boards of Texas A&M University
and the University of Texas at Austin.
PHYLLIS BURKE DAVIS, P.O. Box 264, Bridgehampton , NY, Trustee
(1992). Prior to her retirement in September 1991, Mrs. Davis was the
Senior Vice President of Corporate Affairs of Avon Products, Inc. She is
currently a Director of BellSouth Corporation (telecommunications), Eaton
Corporation (manufacturing, 1991), and the TJX Companies, Inc. (retail
stores, 1990), and previously served as a Director of Hallmark Cards, Inc.
(1985-1991) and Nabisco Brands, Inc. In addition, she serves as a Director
of the New York City Chapter of the National Multiple Sclerosis Society,
and is a member of the Advisory Council of the International Executive
Service Corps. and the President's Advisory Council of The University of
Vermont School of Business Administration (1988).
RICHARD J. FLYNN, 77 Fiske Hill, Sturbridge, MA, Trustee, is a financial
consultant. Prior to September 1986, Mr. Flynn was Vice Chairman and a
Director of the Norton Company (manufacturer of industrial devices). He is
currently a Director of Mechanics Bank and a Trustee of College of the Holy
Cross and Old Sturbridge Village, Inc.
E. BRADLEY JONES, 3 881-2 Lander Road, Chagrin Falls , OH, Trustee
(1990). Prior to his retirement in 1984, Mr. Jones was Chairman and Chief
Executive Officer of LTV Steel Company. Prior to May 1990, he was Director
of National City Corporation (a bank holding company) and National City
Bank of Cleveland. He is a Director of TRW Inc. (original equipment and
replacement products), Cleveland-Cliffs Inc . (mining), NACCO
Industries, Inc. (mining and marketing), Consolidated Rail Corporation,
Birmingham Steel Corporation (1988), Hyster-Yale Materials Handling, Inc.
(1989), and RPM, Inc. (manufacturer of chemical products, 1990). In
addition, he serves as a Trustee of First Union Real Estate Investments;
Chairman of the Board of Trustees and a member of the Executive Committee
of the Cleveland Clinic Foundation, a Trustee and a member of the Executive
Committee of University School (Cleveland), and a Trustee of Cleveland
Clinic Florida.
DONALD J. KIRK, 680 Steamboat Road, Apartment #1-North, Greenwich, CT,
Trustee, is a Professor at Columbia University Graduate School of Business
and a financial consultant. Prior to 1987, he was Chairman of the Financial
Accounting Standards Board. Mr. Kirk is a Director of General Re
Corporation (reinsurance) and Valuation Research Corp. (appraisals and
valuations, 1993). In addition, he serves as Vice Chairman of the Board
of Directors of the National Arts Stabilization Fund and Vice Chairman of
the Board of Trustees of the Greenwich Hospital Association (1989).
*PETER S. LYNCH, Trustee (1990) is Vice Chairman of FMR (1992). Prior to
his retirement on May 31, 1990, he was a Director of FMR (1989) and
Executive Vice President of FMR (a position he held until March 31, 1991);
Vice President of Fidelity Magellan Fund and FMR Growth Group Leader; and
Managing Director of FMR Corp. Mr. Lynch was also Vice President of
Fidelity Investments Corporate Services (1991-1992). He is a Director of
W.R. Grace & Co. (chemicals, 1989) and Morrison Knudsen Corporation
(engineering and construction, 1988). In addition, he serves as a Trustee
of Boston College, Massachusetts Eye & Ear Infirmary, Historic
Deerfield (1989) and Society for the Preservation of New England
Antiquities, and as an Overseer of the Museum of Fine Arts of Boston
(1990).
GERALD C. McDONOUGH, 135 Aspenwood Drive, Cleveland, OH, Trustee (1989), is
Chairman of G.M. Management Group (strategic advisory services). Prior to
his retirement in July 1988, he was Chairman and Chief Executive Officer of
Leaseway Transportation Corp. (physical distribution services). Mr.
McDonough is a Director of ACME-Cleveland Corp. (metal working,
telecommunications and electronic products), Brush-Wellman Inc. (metal
refining), York International Corp. (air conditioning and refrigeration,
1989), Commercial Intertech Corp. (water treatment equipment, 1992) , and
Associated Estates Realty Corporation (a real estate investment trust,
1993) .
EDWARD H. MALONE, 5601 Turtle Bay Drive #2104, Naples, FL, Trustee (1988).
Prior to his retirement in 1985, Mr. Malone was Chairman, General Electric
Investment Corporation and a Vice President of General Electric Company. He
is a Director of Allegheny Power Systems, Inc. (electric utility), General
Re Corporation (reinsurance) and Mattel Inc. (toy manufacturer). He is also
a Trustee of Rensselaer Polytechnic Institute and of Corporate Property
Investors and a member of the Advisory Boards of Butler Capital Corporation
Funds and Warburg, Pincus Partnership Funds.
MARVIN L. MANN, 55 Railroad Avenue, Greenwich, CT, Trustee (1993) is
Chairman of the Board, President, and Chief Executive Officer of Lexmark
International, Inc. (office machines, 1991). Prior to 1991, he held the
positions of Vice President of International Business Machines Corporation
("IBM") and President and General Manager of various IBM divisions and
subsidiaries. Mr. Mann is a Director of M.A. Hanna Company (chemicals,
1993) and Infomart (marketing services, 1991), a Trammell Crow Co. In
addition, he serves as the Campaign Vice Chairman of the Tri-State United
Way (1993) and is a member of the University of Alabama President's Cabinet
(1990).
THOMAS R. WILLIAMS, 21st Floor, 191 Peachtree Street, N.E., Atlanta, GA,
Trustee (1988), is President of The Wales Group, Inc. (management and
financial advisory services). Prior to retiring in 1987, Mr. Williams
served as Chairman of the Board of First Wachovia Corporation (bank holding
company), and Chairman and Chief Executive Officer of The First National
Bank of Atlanta and First Atlanta Corporation (bank holding company). He is
currently a Director of BellSouth Corporation (telecommunications),
ConAgra, Inc. (agricultural products), Fisher Business Systems, Inc.
(computer software, 1988), Georgia Power Company (electric utility), Gerber
Alley & Associates, Inc. (computer software), National Life Insurance
Company of Vermont, American Software, Inc. (1989), and AppleSouth, Inc.
(restaurants, 1992).
GARY L. FRENCH, Treasurer (1991). Prior to becoming Treasurer of the
Fidelity funds, Mr. French was Senior Vice President, Fund Accounting
- Fidelity Accounting & Custody Services Co. (1991); Vice
President, Fund Accounting - Fidelity Accounting & Custody
Services Co. (1990); and Senior Vice President, Chief Financial and
Operations Officer - Huntington Advisers, Inc. (1985-1990).
ARTHUR S. LORING, Secretary, is Senior Vice President and General
Counsel of FMR, Vice President-Legal of FMR Corp., and Vice President
and Clerk of FDC.
ROBERT H. MORRISON, Manager, Security Transactions, is an employee of FMR.
WILL DANOFF, Vice President of the fund (1992), is an employee of FMR.
Under a retirement program that became effective on November 1, 1989,
Trustees, upon reaching age 72, become eligible to participate in a defined
benefit retirement program under which they receive payments during their
lifetime from the fund based on their basic trustee fees and length of
service. Currently, Messrs. Robert L. Johnson, William R. Spaulding,
Bertram H. Witham, and David L. Yunich participate in the program.
As of December 31, 1993, the Trustees and officers of the fund owned in the
aggregate, less than 1 % of the fund's total outstanding shares.
MANAGEMENT CONTRACT
The fund employs FMR to furnish investment advisory and other services.
Under its management contract with the fund, FMR acts as investment adviser
and, subject to the supervision of the Board of Trustees, directs the
investments of the fund in accordance with its investment objective,
policies, and limitations. FMR also provides the fund with all necessary
office facilities and personnel for servicing the fund's investments, and
compensates all officers of the fund, all Trustees who are "interested
persons" of the fund or of FMR, and all personnel of the fund or FMR
performing services relating to research, statistical, and investment
activities.
In addition, FMR or its affiliates, subject to the supervision of the Board
of Trustees, provide the management and administrative services necessary
for the operation of the fund. These services include providing facilities
for maintaining the fund's organization; supervising relations with
custodians, transfer and pricing agents, accountants, underwriters, and
other persons dealing with the fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining the fund's
records and the registration of the fund's shares under federal and state
law; developing management and shareholder services for the fund; and
furnishing reports, evaluations, and analyses on a variety of subjects to
the Board of Trustees.
In addition to the management fee payable to FMR and the fees payable to
FSC, the fund pays all of its expenses, without limitation, that are not
assumed by those parties. The fund pays for typesetting, printing, and
mailing proxy material to shareholders, legal expenses, and the fees of the
custodian, auditor, and non-interested Trustees. Although the fund's
management contract provides that the fund will pay for typesetting,
printing, and mailing of prospectuses, statements of additional
information, notices, and reports to existing shareholders, the fund has
entered into a revised transfer agent agreement with FSC, pursuant to which
FSC bears the cost of providing these services to existing shareholders.
Other expenses paid by the fund include interest, taxes, brokerage
commissions, the fund's proportionate share of insurance premiums and
Investment Company Institute dues, and the costs of registering shares
under federal and state securities laws. The fund is also liable for such
nonrecurring expenses as may arise, including costs of any litigation to
which the fund may be a party and any obligation it may have to indemnify
the fund's officers and Trustees with respect to litigation.
FMR is the fund's manager pursuant to a management contract dated January
1, 1993 which was approved by shareholders on December 16, 1992. For the
services of FMR under the contract, the fund pays FMR a monthly management
fee composed of the sum of two elements: a basic fee and a performance
adjustment based on a comparison of the fund's performance to that of the
Standard & Poor's Composite Stock Price Index (S&P 500).
COMPUTING THE BASIC FEE. The fund's basic fee rate is composed of two
elements: a group fee rate and an individual fund fee rate. The group fee
rate is based on the monthly average net assets of all of the registered
investment companies with which FMR has management contracts and is
calculated on a cumulative basis pursuant to the graduated fee rate
schedule shown to the left of the following chart. On the right of
the chart, the effective fee rate schedule shows the results of
cumulatively applying the annualized rates at varying asset levels. For
example, the effective annual fee rate at $233 billion of group
assets - their approximate level for December 1993 - was
.3243 %, which is the weighted average of the respective fee rates
for each level of group net assets up to $233 billion.
GROUP FEE RATE SCHEDULE* EFFECTIVE ANNUAL FEE RATES
Average Group Annualized Group Net Effective Annual
Assets Rate Assets Fee Rate
0 - $ 3 billion .520% $0.5 billion .5200%
3 - 6 .490 25 .4238
6 - 9 .460 50 .3823
9 - 12 .430 75 .3626
12 - 15 .400 100 .3512
15 - 18 .385 125 .3430
18 - 21 .370 150 .3371
21 - 24 .360 175 .3325
24 - 30 .350 200 .3284
30 - 36 .345 225 .3253
36 - 42 .340 250 .3223
42 - 48 .335 275 .3198
48 - 66 .325 300 .3175
66 - 84 .320 325 .3153
84 - 102 .315 350 .3133
102 - 138 .310
138 - 174 .305
174 - 228 .300
228 - 282 .295
282 - 336 .290
Over 336 .285
* The rates shown for average group assets in excess of $174 billion were
adopted by FMR on a voluntary basis on Nov e mber 1, 1993 pending
shareholder approval of a new management contract reflecting the extended
schedule. The extended schedule provides for lower management fees as total
assets under management increase.
The individual fund fee rate is .30%. Based on the average net assets of
funds advised by FMR for December 1993, the annual management fee rate
would be calculated as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Group Fee Rate Individual Fund Fee Rate Management Fee Rate
.3243 % + .30% = .6243 %
</TABLE>
One twelfth (1/12) of this annual management fee rate is then applied to
the fund's average net assets for the current month, giving a dollar amount
which is the fee for that month.
The schedule shown above (minus the breakpoints added November 1, 1993) was
voluntarily adopted by FMR on January 1, 1992 until shareholders could meet
to approve the current contract . P rior to January 1, 1992, the
fund's group fee rate was based on a sche d ule with breakpoints
ending at .310% for average group assets in excess of $102 billion.
Prior to January 1, 1993, the date of the current management contract,
the individual fund fee rate was .09%.
COMPUTING THE PERFORMANCE ADJUSTMENT. The basic fee is subject to
upward or downward adjustment, depending upon whether, and to what extent,
the fund's investment performance for the performance period exceeds, or is
exceeded by the record of the S&P 500 over the same period. The
performance period consists of the most recent month plus the previous 35
months . Each percentage point of difference (up to a maximum
difference of + 10) is multiplied by a performance adjustment of .02%.
Thus, the maximum annualized adjustment rate is + .20%. This performance
comparison is made at the end of each month. One twelfth of this rate is
then applied to the fund's average net assets for the entire performance
period, giving a dollar amount which is added to (or subtracted from) the
basic fee.
The fund's performance is calculated based on change in net asset value.
For purposes of calculating the performance adjustment, any dividends or
capital gain distributions paid by the fund are treated as if reinvested in
fund shares at the net asset value as of the record date for payment. The
record of the S&P 500 is based on change in value and is adjusted for
any cash distributions from the companies whose securities comp ri se
the S&P 500.
Because the adjustment to the basic fee is based on the fund's performance
compared to the investment record of the S&P 500, the controlling
factor is not whether the fund's performance is up or down per se, but
whether it is up or down more or less than the record of the S&P 500.
Moreover, the comparative investment performance of the fund is based
solely on the relevant performance period without regard to the cumulative
performance over a longer or shorter period of time.
During the fiscal years ended December 31, 1993, 1992, and 1991, FMR
received the payments shown in the following table for its services as
investment adviser to the fund. These fees include both the basic fee and
the performance adjustment. If FMR had not voluntarily adopted the extended
group fee rate schedule, these fees would have been higher.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fiscal Year Management Fee Paid to Management Fee as a % of Performance Adjustment
FMR Average Net Assets to Basic Fee
1993 $28,495,000 .69 % $2,669,000
1992 6,863,675 .51% 1,182,937
1991 3,424,099 . 52% 595,207
</TABLE>
To comply with the California Code of Regulations, FMR will reimburse the
fund if and to the extent that the fund's aggregate annual operating
expenses exceed specified percentages of its average net assets. The
applicable percentages are 2 1/2% of the first $30 million, 2% of the next
$70 million, and 1 1/2% of average net assets in excess of $100 million.
When calculating the fund's expenses for purposes of this regulation, the
fund may exclude interest, taxes, brokerage commissions, and extraordinary
expenses, as well as a portion of its custodian fees attributable to
investments in foreign securities.
SUB-ADVISERS. On November 1, 1989 FMR entered into sub-advisory agreements
with FMR U.K. and FMR Far East pursuant to which FMR U.K. and FMR Far East
supply FMR with investment research and recommendations concerning foreign
securities for the benefit of the fund. The sub-advisory agreements provide
that FMR will pay fees to FMR U.K. and FMR Far East equal to 110% and 105%,
respectively, of FMR U.K.'s and FMR Far East's costs incurred in connection
with each agreement, said costs to be determined in relation to the assets
of the fund that benefit from the services of the sub-advisers.
The fees paid to FMR U.K. and FMR Far East under the sub-advisory
agreements for fiscal 1993, 1992, and 1991 are indicated in the table
below.
Fiscal Year FMR UK FMR Far East
1993 $93,009 $139,014
1992 9,915 8,357
1991 3,000 2,900
CONTRACTS WITH COMPANIES AFFILIATED WITH FMR
FSC is transfer, dividend disbursing, and shareholders' servicing agent for
the fund. Under the f und's contract with FSC, the fund pays an
annual fee of $26.03 per basic retail account with a balance of
$5,000 or more, $15.31 per basic retail account with a balance of
less than $5,000 , and a supplemental activity charge of $6.11
for monetary transactions. These fees and charges are subject to annual
cost escalation based on changes in postal rates and changes in wage and
price levels as measured by the National Consumer Price Index for Urban
Areas. With respect to certain institutional client master accounts, the
fund pays FSC a per account fee of $95, and monetary transaction charges of
$20 and $17.50, depending on the nature of services provided. With respect
to certain broker-dealer master accounts, the fund pays FSC a per-account
fee of $30, and a charge of $6 for monetary transactions. Fees for certain
institutional retirement plan accounts are based on the net asset of all
such accounts in the fund.
Under the contract, FSC pays out-of-pocket expenses associated with
providing transfer agent services. In addition, FSC bears the expense of
typesetting, printing, and mailing prospectuses, statements of additional
information, and all other reports, notices, and statements to
shareholders, with the exception of proxy statements. Transfer agent
fees, including reimbursement for out-of-pocket expenses, paid to FSC for
the fiscal years ended December 31, 1993, 1992, and 1991 were $11,969,000,
$3,715,409, and $1,644,370, respectively. If a portion of the fund's
brokerage commissions had not resulted in payment of certain of these fees,
the fund would have paid transfer agent fees of $12,923,000, $3,715,409,
and $1,644,370 , respectively.
The fund's contract with FSC also provides that FSC will perform the
calculations necessary to determine the fund's net asset value per share
and dividends, and maintain the fund's accounting records. Prior to July 1,
1991, the annual fee for these pricing and bookkeeping services was based
on two schedules, one pertaining to the fund's average net assets, and one
pertaining to the type and number of transactions the fund made. The fee
rates in effect as of July 1, 1991 are based on the fund's average net
assets, specifically, .06% for the first $500 million of average net assets
and .03% for average net assets in excess of $500 million. The fee is
limited to a minimum of $45,000 and a maximum of $750,000 per year.
FSC also receives fees for administering the fund's securities lending
program. Securities lending fees are based on the number and duration of
individual securities loans. Securities lending fees for fiscal 1993, 1992,
and 1991 amounted to approximately $27,000, $1,550, and $13,840,
respectively.
Pricing and bookkeeping fees, including related out-of-pocket expenses,
paid to FSC for fiscal 1993, 1992, and 1991 were $802,000, $571,715, and
$334,273 , respectively.
The fund has a distribution agreement with FDC, a Massachusetts corporation
organized on July 18, 1960. FDC is a broker-dealer registered under the
Securities Exchange Act of 1934 and is a member of the National Association
of Securities Dealers, Inc. The distribution agreement calls for FDC to use
all reasonable efforts, consistent with its other business, to secure
purchasers for shares of the fund, which are continuously offered .
Promotional and administrative expenses in connection with the offer and
sale of shares are paid by FDC . Sales charge revenue paid to FDC
for fiscal 1993, 1992, and 1991 amounted to $32,505,000, $11,185,497, and
$6,997,432, respectively.
DESCRIPTION OF THE FUND
FUND ORGANIZATION. Fidelity Contrafund is an open-end management investment
company originally organized as a Massachusetts corporation on June 3,
1963. On October 7, 1980, the fund's name was changed from Contrafund, Inc.
to Fidelity Contrafund, Inc. On December 31, 1984, the fund was reorganized
as a Massachusetts business trust, at which time its name was change to
Fidelity Contrafund.
In the event that FMR ceases to be the investment adviser to the trust or a
fund, the right of the trust or fund to use the identifying name "Fidelity"
may be withdrawn. The fund's Declaration of Trust permits the trustees
to create additional funds.
SHAREHOLDER AND TRUSTEE LIABILITY. The fund is an entity of the type
commonly known as a "Massachusetts business trust." Under Massachusetts
law, shareholders of such a fund may, under certain circumstances, be held
personally liable for the obligations of the fund. The Declaration of Trust
provides that the fund shall not have any claim against shareholders,
except for the payment of the purchase price of shares, and requires that
each agreement, obligation, or instrument entered into or executed by the
fund or the Trustees include a provision limiting the obligations created
thereby to the fund and its assets. The Declaration of Trust provides for
indemnification out of the fund's property of any shareholder held
personally liable for the obligations of the fund. The Declaration of Trust
also provides that the fund shall, upon request, assume the defense of any
claim made against any shareholder for any act or obligation of the fund
and satisfy any judgment thereon. Thus, the risk of a shareholder incurring
financial loss on account of shareholder liability is limited to
circumstances in which the fund itself would be unable to meet its
obligations. FMR believes that, in view of the above, the risk of personal
liability to shareholders is remote.
The Declaration of Trust further provides that the Trustees, if they have
exercised reasonable care, will not be liable for any neglect or
wrongdoing, but nothing in the Declaration of Trust protects a Trustee
against any liability to which they would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence, or reckless disregard of
the duties involved in the conduct of their office.
VOTING RIGHTS. The fund's capital consists of shares of beneficial
interest. The shares have no preemptive or conversion rights; the
voting and dividend rights, the right of redemption, and the privilege
of exchange are described in the Prospectus. Shares are fully paid and
nonassessable, except as set forth under the heading "Shareholder and
Trustee Liability" above. Shareholders representing 10% or more of the fund
may, as set forth in the Declaration of Trust, call meetings of the fund
for any purpose including the purpose of voting on removal of one or more
Trustees. The fund may be terminated upon the sale of its assets to another
open-end management investment company, or upon liquidation and
distribution of its assets, if approved by vote of the holders of a
majority of the outstanding shares of the fund. If not so terminated, the
fund will continue indefinitely.
CUSTODIAN. B r own Brothers Harriman & Co., 40 Water Street,
Boston, Massachusetts is custodian of the assets of the fund. The custodian
is responsible for the safekeeping of the fund's assets and the appointment
of sub-custodian banks and clearing agencies. The custodian takes no part
in determining the investment policies of the fund, or in deciding which
securities are purchased or sold by the fund. The fund may, however, invest
in obligations of the custodian and may purchase securities from or sell
securities to the custodian.
FMR, its officers and directors, its affiliated companies, and the fund's
Trustees may from time to time have transactions with various banks,
including banks serving as custodians for certain of the funds advised by
FMR. The Boston branch of the fund's custodian leases its office space from
an affiliate of FMR at a lease payment which, when entered into, was
consistent with prevailing market rates. Transactions that have occurred to
date include mortgages and personal and general business loans. In the
judgment of FMR, the terms and conditions of those transactions were not
influenced by existing or potential custodial or other fund relationships.
AUDITOR. Coopers & Lybrand, One Post Office Square, Boston,
Massachusetts, serves as the fund's independent accountant. The auditor
examines financial statements for the fund and provides other audit, tax,
and related services.
FINANCIAL STATEMENTS
The fund's Annual Report for the fiscal year ended December 31, 1993 is a
separate report supplied with this Statement of Additional Information and
is incorporated herein by reference.
PART C - OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial statements for Fidelity Contrafund for the fiscal year ended
December 31, 1993 are incorporated by reference into the fund's Statement
of Additional Information and are filed herein as Exhibit 24(a).
(b) Exhibits:
1. (a) Declaration of Trust dated October 1, 1984 is incorporated herein
by reference to Exhibit 1(a) to Post-Effective Amendment No. 26.
(b) Supplement to the Declaration of Trust dated February 1, 1985 is
incorporated herein by reference to Exhibit 1(b) to Post-Effective
Amendment No. 34.
(c) Supplement to the Declaration of Trust dated October 30, 1986 is
incorporated herein by reference to Exhibit 1(b) to Post-Effective
Amendment No. 34.
(d) Supplement to the Declaration of Trust is incorporated herein by
reference to Exhibit 1(c) to Post-Effective Amendment No. 38.
2. (a) Bylaws of the Trust are incorporated herein by reference to Exhibit
2(a) to Post-Effective Amendment No. 27.
(b) Supplement to the Bylaws of the Fund is incorporated herein by
reference to Exhibit 2(b) of Post-Effective Amendment No. 39.
3. Not applicable.
4. Not applicable.
5. (a) Management Contract dated January 1, 1993 between Fidelity
Contrafund and Fidelity Management & Research Company is filed herein
by reference to Exhibit 5(a) to Post-Effective Amendment No. 44.
(b) Sub-Advisory Agreement dated November 1, 1989 between Fidelity
Management & Research (U.K.) Inc. and Fidelity Management &
Research Company on behalf of Fidelity Contrafund is incorporated herein by
reference to Exhibit 5(c) to Post-Effective Amendment No. 39.
(c) Sub-Advisory Agreement dated November 1, 1989 between Fidelity
Management & Research (Far East) Inc. and Fidelity Management &
Research Company on behalf of Fidelity Contrafund is incorporated herein by
reference to Exhibit 5(d) to Post-Effective Amendment No. 39.
6. (a) General Distribution Agreement dated April 1, 1987 between Fidelity
Contrafund and Fidelity Distributors Corporation is incorporated herein by
reference to Exhibit 6 to Post-Effective Amendment No. 35.
(b) Amendment to General Distribution Agreement dated January 1, 1988
between Fidelity Contrafund and Fidelity Distributors Corporation is
incorporated herein by reference to Exhibit 6(b) to Post-Effective
Amendment No. 37.
7. Retirement Plan for Non-Interested Person Trustees, Directors or
General Partners, effective November 1, 1989, is incorporated herein by
reference to Exhibit 7 to Post-Effective Amendment No. 42.
8. (a) Custodian Agreement dated July 18, 1991 between Fidelity Contrafund
and Brown Brothers Harriman & Co. is incorporated herein by reference
to Exhibit 8(a) to Post-Effective Amendment No. 42.
9. (a) Master Service Agreement dated December 31, 1985 between Fidelity
Contrafund, FMR Corp., and Fidelity Service Co. is incorporated by
reference to Exhibit 9(b) to Post-Effective Amendment No. 31.
(b) Amended Master Service Agreement dated June 1, 1989 between Fidelity
Contrafund, FMR Corp., and Fidelity Service Co. is incorporated herein by
reference to Exhibit 9(b) to Post-Effective Amendment No. 38.
(c) Schedules A (transfer, dividend disbursing and shareholders' service);
B (pricing and bookkeeping); and C (securities lending transactions) to the
Amended Service Agreement dated June 1, 1989 for Fidelity Contrafund are
incorporated herein by reference to Exhibit 9(c) to Post-Effective
Amendment No. 38.
10. Not applicable.
11. Consent of Coopers & Lybrand is filed herein as Exhibit 11.
12. Not applicable.
13. Not applicable.
14. (a) Fidelity Individual Retirement Account Custodial Agreement and
Disclosure Statement, as currently in effect, is incorporated herein by
reference to Exhibit 14(a) to Post-Effective Amendment No. 40.
(b) Fidelity 403(b)(7) Custodial Account Agreement, as currently in effect,
is incorporated herein by reference to Exhibit 14(b) to Post-Effective
Amendment No. 40.
(c) Fidelity Defined Contribution Retirement Plan and Trust Agreement, as
currently in effect, is incorporated herein by reference to Exhibit 14(c)
to Post-Effective Amendment No. 40.
(d) Fidelity Defined Benefit Pension Plan and Trust, as currently in
effect, is incorporated herein by reference to Exhibit 14(d) to
Post-Effective Amendment No. 40.
(e) Fidelity 401(a) Prototype Plan for Tax-Exempt Employers, as currently
in effect, is incorporated herein by reference to Exhibit 14(e) to
Post-Effective Amendment No. 40.
(f) Fidelity Master Plan for Savings and Investments, as currently in
effect, is incorporated herein by reference to Exhibit 14(f) to
Post-Effective Amendment No. 40.
(g) Fidelity Group Individual Retirement Account Custodial Agreement and
Disclosure Statement, as currently in effect, is incorporated herein by
reference to Exhibit 14(g) to Post-Effective Amendment No. 40.
15. Not applicable.
16. A schedule for computation of performance quotation for Fidelity
Contrafund is incorporated herein by reference to Exhibit 16 to
Post-Effective Amendment No. 37.
Item 25. Persons Controlled by or under Common Control with Registrant
The Board of Trustees of the Registrant is the same as the board of other
funds advised by FMR, each of which has Fidelity Management & Research
Company as its investment adviser. In addition, the officers of these funds
are substantially identical. Nonetheless, the Registrant takes the
position that it is not under common control with these other funds since
the power residing in the respective boards and officers arises as the
result of an official position with the respective funds.
Item 26. Number of Holders of Securities December 31, 1993
Title of Class: Shares of Beneficial Interest
Name of Series Number of Record Holders
Fidelity Contrafund 626,065
Item 27. Indemnification
Article XI, Section 2 of the Declaration of Trust sets forth the
reasonable and fair means for determining whether indemnification shall be
provided to any past or present Trustee or officer. It states that the
Registrant shall indemnify any present or past Trustee, or officer to the
fullest extent permitted by law against liability and all expenses
reasonably incurred by him in connection with any claim, action suit or
proceeding in which he is involved by virtue of his service as a trustee,
an officer, or both. Additionally, amounts paid or incurred in settlement
of such matters are covered by this indemnification. Indemnification will
not be provided in certain circumstances, however. These include instances
of willful misfeasance, bad faith, gross negligence, and reckless disregard
of the duties involved in the conduct of the particular office involved.
Item 28. Business and Other Connections of Investment Adviser
(1) FIDELITY MANAGEMENT & RESEARCH COMPANY
FMR serves as investment adviser to a number of other investment
companies. The directors and officers of the Adviser have held, during the
past two fiscal years, the following positions of a substantial nature.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman of the Executive Committee of FMR; President and
Chief Executive Officer of FMR Corp.; Chairman of the Board
and a Director of FMR, FMR Corp., FMR Texas Inc. (1989),
Fidelity Management & Research (U.K.) Inc. and Fidelity
Management & Research (Far East) Inc.; President and
Trustee of funds advised by FMR;
J. Gary Burkhead President of FMR; Managing Director of FMR Corp.; President
and a Director of FMR Texas Inc. (1989), Fidelity Management
& Research (U.K.) Inc. and Fidelity Management &
Research (Far East) Inc.; Senior Vice President and Trustee of
funds advised by FMR.
Robert Beckwitt Vice President of FMR (1991) and of funds advised by FMR.
Rufus C. Cushman, Jr. Vice President of FMR and of funds advised by FMR; Corporate
Preferred Group Leader.
Penelope Dobkin Vice President of FMR (1990) and of a fund advised by FMR.
Charles F. Dornbush Senior Vice President of FMR (1991); Chief Financial Officer of
the Fidelity funds; Treasurer of FMR Texas Inc. (1989), Fidelity
Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
Robert K. Duby Vice President of FMR.
Margaret L. Eagle Vice President of FMR and of funds advised by FMR.
Kathryn L. Eklund Vice President of FMR (1991).
Richard B. Fentin Vice President of FMR and of a fund advised by FMR.
Daniel R. Frank Vice President of FMR and of funds advised by FMR.
Gary L. French Vice President of FMR (1991) and Treasurer of the funds advised
by FMR (1991). Prior to assuming the position as Treasurer he
was Senior Vice President, Fund Accounting - Fidelity Accounting
& Custody Services Co. (1991) (Vice President, 1990-1991);
and Senior Vice President, Chief Financial and Operations Officer
- Huntington Advisers, Inc. (1985-1990).
Michael S. Gray Vice President of FMR and of funds advised by FMR.
Barry A. Greenfield Vice President of FMR and of funds advised by FMR.
William J. Hayes Senior Vice President of FMR (1989); Income/Growth Group
Leader (1990) and International Group Leader (1990).
Robert Haber Vice President of FMR (1991) and of funds advised by FMR.
Daniel Harmetz Vice President of FMR (1991) and of a fund advised by FMR.
Ellen S. Heller Vice President of FMR (1991).
Robert F. Hill Vice President of FMR (1989); and Director of Technical
Research.
Robert A. Lawrence Vice President of FMR (1991); and High Income Group Leader.
Alan Leifer Vice President of FMR and of a fund advised by FMR.
Bradford E. Lewis Vice President of FMR (1991) and of funds advised by FMR.
Robert H. Morrison Vice President of FMR and Director of Equity Trading.
David Murphy Vice President of FMR (1991) and of funds advised by FMR.
Jacques Perold Vice President of FMR (1991).
Anne Punzak Vice President of FMR (1990) and of funds advised by FMR.
Richard A. Spillane Vice President of FMR (1990) and of funds advised by FMR; and
Director of Equity Research (1989).
Robert E. Stansky Vice President of FMR (1990) and of funds advised by FMR.
Thomas Steffanci Vice President of FMR (1990); and Fixed-Income Division Head.
Gary L. Swayze Vice President of FMR and of funds advised by FMR; and
Tax-Free Fixed-Income Group Leader.
Beth F. Terrana Vice President of FMR and of funds advised by FMR.
George A. Vanderheiden Senior Vice President of FMR; Vice President of funds advised by
FMR; and Growth Group Leader (1990).
Jeffrey Vinik Vice President of FMR (1991) and of a fund advised by FMR.
Guy E. Wickwire Vice President of FMR and of funds advised by FMR.
Arthur S. Loring Vice President, Clerk and General Counsel of FMR; Vice
President, Legal of FMR Corp.; and Secretary of funds advised by
FMR.
</TABLE>
(2) FIDELITY MANAGEMENT & RESEARCH (U.K.) INC. (FMR U.K.)
FMR U.K. provides investment advisory services to Fidelity Management
& Research Company and Fidelity Management Trust Company. The
directors and officers of the Sub-Adviser have held the following positions
of a substantial nature during the past two fiscal years.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman and Director of FMR U.K.; Chairman of the Executive
Committee of FMR; Chief Executive Officer of FMR Corp.;
Chairman of the Board and a Director of FMR, FMR Corp., FMR
Texas Inc. (1989), and Fidelity Management & Research (Far
East) Inc.; President and Trustee of funds advised by FMR.
J. Gary Burkhead President and Director of FMR U.K.; President of FMR; Managing
Director of FMR Corp.; President and a Director of FMR Texas Inc.
(1989) and Fidelity Management & Research (Far East) Inc.;
Senior Vice President and Trustee of funds advised by FMR.
Richard C. Habermann Senior Vice President of FMR U.K. (1991); Senior Vice President of
Fidelity Management & Research (Far East) Inc. (1991);
Director of Worldwide Research of FMR (1989).
Charles F. Dornbush Treasurer of FMR U.K.; Treasurer of Fidelity Management &
Research (Far East) Inc.; Treasurer of FMR Texas Inc. (1989); Senior
Vice President and Chief Financial Officer of the Fidelity funds.
David Weinstein Clerk of FMR U.K. (1989); Clerk of Fidelity Management &
Research (Far East) Inc. (1989); Secretary of FMR Texas Inc. (1989).
</TABLE>
(3) FIDELITY MANAGEMENT & RESEARCH (FAR EAST) INC. (FMR Far East)
FMR Far East provides investment advisory services to Fidelity Management
& Research Company and Fidelity Management Trust Company. The
directors and officers of the Sub-Adviser have held the following positions
of a substantial nature during the past two fiscal years.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman and Director of FMR Far East; Chairman of the
Executive Committee of FMR; Chief Executive Officer of
FMR Corp.; Chairman of the Board and a Director of FMR,
FMR Corp., FMR Texas Inc. (1989) and Fidelity Management
& Research (U.K.) Inc.; President and Trustee of funds
advised by FMR.
J. Gary Burkhead President and Director of FMR Far East; President of FMR;
Managing Director of FMR Corp.; President and a Director of
FMR Texas Inc. (1989) and Fidelity Management &
Research (U.K.) Inc.; Senior Vice President and Trustee of
funds advised by FMR.
Richard C. Habermann Senior Vice President of FMR Far East (1991); Senior Vice
President of Fidelity Management & Research (U.K.) Inc.
(1991); Director of Worldwide Research of FMR (1989).
William R. Ebsworth Vice President of FMR Far East.
Charles F. Dornbush Treasurer of FMR Far East; Treasurer of Fidelity Management
& Research (U.K.) Inc.; Treasurer of FMR Texas Inc.
(1989); Senior Vice President and Chief Financial Officer of
the Fidelity funds.
David C. Weinstein Clerk of FMR Far East (1989); Clerk of Fidelity Management
& Research (U.K.) Inc. (1989); Secretary of FMR Texas
Inc. (1989).
</TABLE>
Item 29. Principal Underwriters
(a) Fidelity Distributors Corporation (FDC) acts as distributor for most
funds advised by FMR and the following other funds:
CrestFunds, Inc.
The Freedom Fund
ARK Funds
(b)
Name and Principal Positions and Offices Positions and Offices
Business Address* With Underwriter With Registrant
Edward C. Johnson 3d Director Trustee, President
Nita B. Kincaid Director None
W. Humphrey Bogart Director None
Kurt A. Lange President None
Thomas W. Littauer Senior Vice President None
William J. Kearns Senior Vice President None
Harry Anderson Treasurer None
Arthur S. Loring Vice President and Clerk Secretary
* 82 Devonshire Street, Boston, MA
(c) Not applicable.
Item 30. Location of Accounts and Records
All accounts, books, and other documents required to be maintained by
Section 31a of the 1940 Act and the Rules promulgated thereunder are
maintained by Fidelity Management & Research Company or Fidelity
Service Co., 82 Devonshire Street, Boston, MA 02109, or by the fund's
custodian, Brown Brothers Harriman & Co., 40 Water Street, Boston, MA.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
The Registrant undertakes, provided the information required by Item 5A is
contained in the annual report, to furnish each person to whom a prospectus
has been delivered, upon their request and without charge, a copy of the
Registrant's latest annual report to shareholders.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all
of the requirements for the effectiveness of this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Post-Effective Amendment No. 46 to the Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized,
in the City of Boston, and Massachusetts, on the 11th day of February 1994.
FIDELITY CONTRAFUND
By /s/Edward C. Johnson 3d (dagger)
Edward C. Johnson 3d, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
(Signature) (Title) (Date)
<TABLE>
<CAPTION>
<S> <C> <C>
/s/Edward C. Johnson 3d(dagger) President and Trustee February 11, 1994
Edward C. Johnson 3d (Principal Executive Officer)
</TABLE>
/s/Gary L. French Treasurer February 11, 1994
Gary L. French
/s/J. Gary Burkhead Trustee February 11, 1994
J. Gary Burkhead
/s/Ralph F. Cox * Trustee February 11, 1994
Ralph F. Cox
/s/Phyllis Burke Davis * Trustee February 11, 1994
Phyllis Burke Davis
/s/Richard J. Flynn * Trustee February 11, 1994
Richard J. Flynn
/s/E. Bradley Jones * Trustee February 11, 1994
E. Bradley Jones
/s/Donald J. Kirk * Trustee February 11, 1994
Donald J. Kirk
/s/Peter S. Lynch * Trustee February 11, 1994
Peter S. Lynch
/s/Edward H. Malone * Trustee February 11, 1994
Edward H. Malone
/s/Marvin L. Mann_____* Trustee February 11, 1994
Marvin L. Mann
/s/Gerald C. McDonough* Trustee February 11, 1994
Gerald C. McDonough
/s/Thomas R. Williams * Trustee February 11, 1994
Thomas R. Williams
(dagger) Signatures affixed by J. Gary Burkhead pursuant to a power of
attorney dated October 20, 1993 and filed herewith.
* Signature affixed by Robert C. Hacker pursuant to a power of attorney
dated October 20, 1993 and filed herewith.
POWER OF ATTORNEY
I, the undersigned Director, Trustee or General Partner, as the case may
be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series IV Fidelity School Street Trust
Fidelity Advisor Series VI Fidelity Select Portfolios
Fidelity Advisor Series VIII Fidelity Sterling Performance Portfolio, L.P.
Fidelity Beacon Street Trust Fidelity Trend Fund
Fidelity Capital Trust Fidelity Union Street Trust
Fidelity Commonwealth Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Contrafund Fidelity U.S. Investments-Government Securities
Fidelity Deutsche Mark Performance Fund, L.P.
Portfolio, L.P. Fidelity Yen Performance Portfolio, L.P.
Fidelity Devonshire Trust Spartan U.S. Treasury Money Market
Fidelity Financial Trust Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Fidelity Government Securities Fund Variable Insurance Products Fund II
Fidelity Hastings Street Trust
Fidelity Institutional Trust
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individual serves as a Board Member (collectively, the "Funds"), hereby
severally constitute and appoint Arthur J. Brown, Arthur C. Delibert,
Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A.
Xupolos, each of them singly, my true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to sign
for me and in my name in the appropriate capacity, all Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
my name and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorneys-in-fact or their substitutes may do
or cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Phyllis Burke Davis October 20, 1993
Phyllis Burke Davis
POWER OF ATTORNEY
I, the undersigned Director, Trustee or General Partner, as the case may
be, of the following investment cmpanies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Special Situations Fund
Fidelity Advisor Series IV Fidelity Sterling Performance Portfolio, L.P.
Fidelity Advisor Series VI Fidelity Trend Fund
Fidelity Advisor Series VII Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Advisor Series VIII Fidelity U.S. Investments-Government Securities
Fidelity Contrafund Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity Yen Performance Portfolio, L.P.
Portfolio, L.P. Spartan U.S. Treasury Money Market
Fidelity Fixed-Income Trust Fund
Fidelity Government Securities Fund Variable Insurance Products Fund
Fidelity Hastings Street Trust Variable Insurance Products Fund II
Fidelity Institutional Trust
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individual serves as a Board Member (collectively, the "Funds"), hereby
severally constitute and appoint Arthur J. Brown, Arthur C. Delibert,
Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A.
Xupolos, each of them singly, my true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to sign
for me and in my name in the appropriate capacity, all Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
my name and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorneys-in-fact or their substitutes may do
or cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Marvin L. Mann October 20, 1993
Marvin L. Mann
POWER OF ATTORNEY
I, the undersigned Director, Trustee or General Partner, as the case may
be, of the following investment cmpanies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Magellan Fund
Fidelity Advisor Series III Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series IV Fidelity Money Market Trust
Fidelity Advisor Series VI Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VIII Fidelity New York Municipal Trust
Fidelity California Municipal Trust Fidelity Puritan Trust
Fidelity Capital Trust Fidelity School Street Trust
Fidelity Charles Street Trust Fidelity Select Portfolios
Fidelity Commonwealth Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Congress Street Fund Fidelity Summer Street Trust
Fidelity Contrafund Fidelity Trend Fund
Fidelity Deutsche Mark Performance Fidelity Union Street Trust
Portfolio, L.P. Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Devonshire Trust Fidelity U.S. Investments-Government Securities
Fidelity Financial Trust Fund, L.P.
Fidelity Fixed-Income Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Government Securities Fund Spartan U.S. Treasury Money Market
Fidelity Hastings Street Trust Fund
Fidelity Income Fund Variable Insurance Products Fund
Fidelity Institutional Trust Variable Insurance Products Fund II
Fidelity Investment Trust
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individual serves as a Board Member (collectively, the "Funds"), hereby
severally constitute and appoint Arthur J. Brown, Arthur C. Delibert,
Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A.
Xupolos, each of them singly, my true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to sign
for me and in my name in the appropriate capacity, all Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
my name and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorneys-in-fact or their substitutes may do
or cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Ralph F. Cox October 20, 1993
Ralph F. Cox
POWER OF ATTORNEY
I, the undersigned President and Director, Trustee or General Partner, as
the case may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Institutional Trust
Fidelity Advisor Series II Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Magellan Fund
Fidelity Advisor Series IV Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series V Fidelity Money Market Trust
Fidelity Advisor Series VI Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VII Fidelity Municipal Trust
Fidelity Advisor Series VIII Fidelity New York Municipal Trust
Fidelity California Municipal Trust Fidelity Puritan Trust
Fidelity Capital Trust Fidelity School Street Trust
Fidelity Charles Street Trust Fidelity Securities Fund
Fidelity Commonwealth Trust Fidelity Select Portfolios
Fidelity Congress Street Fund Fidelity Sterling Performance Portfolio, L.P.
Fidelity Contrafund Fidelity Summer Street Trust
Fidelity Corporate Trust Fidelity Trend Fund
Fidelity Court Street Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Destiny Portfolios Fidelity U.S. Investments-Government Securities
Fidelity Deutsche Mark Performance Fund, L.P.
Portfolio, L.P. Fidelity Union Street Trust
Fidelity Devonshire Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Exchange Fund Spartan U.S. Treasury Money Market
Fidelity Financial Trust Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Fidelity Government Securities Fund Variable Insurance Products Fund II
Fidelity Hastings Street Trust
Fidelity Income Fund
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individual serves as President and Board Member (collectively, the
"Funds"), hereby severally constitute and appoint J. Gary Burkhead, my true
and lawful attorney-in-fact, with full power of substitution, and with full
power to sign for me and in my name in the appropriate capacity, all
Pre-Effective Amendments to any Registration Statements of the Funds, any
and all subsequent Post-Effective Amendments to said Registration
Statements, any Registration Statements on Form N-14, and any supplements
or other instruments in connection therewith, and generally to do all such
things in my name and behalf in connection therewith as said
attorney-in-fact deem necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and Investment Company Act of
1940, and all related requirements of the Securities and Exchange
Commission. I hereby ratify and confirm all that said attorneys-in-fact or
their substitutes may do or cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d October 20, 1993
Edward C. Johnson 3d
POWER OF ATTORNEY
We, the undersigned Directors, Trustees or General Partners, as the case
may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Institutional Trust
Fidelity Advisor Series II Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Magellan Fund
Fidelity Advisor Series IV Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series V Fidelity Money Market Trust
Fidelity Advisor Series VI Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VII Fidelity Municipal Trust
Fidelity Advisor Series VIII Fidelity New York Municipal Trust
Fidelity California Municipal Trust Fidelity Puritan Trust
Fidelity Capital Trust Fidelity School Street Trust
Fidelity Charles Street Trust Fidelity Securities Fund
Fidelity Commonwealth Trust Fidelity Select Portfolios
Fidelity Congress Street Fund Fidelity Sterling Performance Portfolio, L.P.
Fidelity Contrafund Fidelity Summer Street Trust
Fidelity Corporate Trust Fidelity Trend Fund
Fidelity Court Street Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Destiny Portfolios Fidelity U.S. Investments-Government Securities
Fidelity Deutsche Mark Performance Fund, L.P.
Portfolio, L.P. Fidelity Union Street Trust
Fidelity Devonshire Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Exchange Fund Spartan U.S. Treasury Money Market
Fidelity Financial Trust Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Fidelity Government Securities Fund Variable Insurance Products Fund II
Fidelity Hastings Street Trust
Fidelity Income Fund
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individuals serve as Board Members (collectively, the "Funds"), hereby
severally constitute and appoint Arthur J. Brown, Arthur C. Delibert,
Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A.
Xupolos, each of them singly, our true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to sign
for us and in our names in the appropriate capacities, all Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
our names and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorneys-in-fact or their substitutes may do
or cause to be done by virtue hereof.
WITNESS our hands on this twentieth day of October, 1993.
/s/Edward C. Johnson 3d /s/Peter S. Lynch
Edward C. Johnson 3d Peter S. Lynch
/s/J. Gary Burkhead /s/Edward H. Malone
J. Gary Burkhead Edward H. Malone
/s/Richard J. Flynn /s/Gerald C. McDonough
Richard J. Flynn Gerald C. McDonough
/s/E. Bradley Jones /s/Thomas R. Williams
E. Bradley Jones Thomas R. Williams
/s/Donald J. Kirk
Donald J. Kirk
FIDELITY
(Registered trademark)
CONTRAFUND
ANNUAL REPORT
DECEMBER 31, 1993
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on minimizing taxes.
PERFORMANCE 4 How the fund has done over time.
FUND TALK 6 The manager's review of fund
performance, strategy, and outlook.
INVESTMENT CHANGES 9 A summary of major shifts in the
fund's investments over the last six
months.
INVESTMENTS 10 A complete list of the fund's
investments with their market value.
FINANCIAL STATEMENTS 35 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.
NOTES 39 Footnotes to the financial
statements.
REPORT OF INDEPENDENT 44 The auditor's opinion.
ACCOUNTANTS
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR
ACCOMPANIED BY
AN EFFECTIVE PROSPECTUS. NEITHER THE FUND NOR FIDELITY DISTRIBUTORS
CORPORATION IS A
BANK, AND FUND SHARES ARE NOT BACKED OR GUARANTEED BY ANY BANK OR INSURED
BY THE
FDIC.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
Once the new year begins, many people start reviewing their finances and
calculating their tax bills. No one wants to pay more taxes than they have
to. But a recent survey of 500 U.S. households, conducted by Fidelity and
Yankelovich Partners, showed that few people have taken steps to reduce
their taxes under the new legislation. Many were not even aware that the
new tax laws were retroactive to January 1993.
Whether or not you're someone whose tax bill will increase as a result of
these changes, it may make sense to consider ways to keep more of what you
earn.
First, if your employer offers a 401(k) or 403(b) retirement savings plan,
consider enrolling. These plans are set up so you can make regular
contributions -
before taxes - to a retirement savings plan. They offer a disciplined
savings strategy, the ability to accumulate earnings tax-deferred, and
immediate tax savings. For example, if you earn $40,000 a year and
contribute 7% of your salary to your 401(k) plan, your annual contribution
is $2,800. That reduces your taxable income to $37,200 and, if you're in
the
28% tax bracket, saves you $784 in federal taxes. In addition, you pay no
taxes on any earnings until withdrawal.
It may be a good idea to contact your benefits office as soon as possible
to find out when you can enroll or increase your contribution. Most
employers allow employees to make changes only a few times each year.
Second, consider an IRA. Many people are eligible to make an IRA
contribution (up to $2,000) that is fully tax deductible. That includes
people who are not covered by company pension plans, or those within
certain income brackets. Even if you don't qualify for a fully deductible
contribution, any IRA earnings will grow tax-deferred until withdrawal.
Third, consider adding to your tax-free investments, either municipal bonds
or municipal bond funds. Often these can provide higher after-tax yields
than comparable taxable investments. For example, if you're in the new 36%
federal income tax bracket and invest $10,000 in a taxable investment
yielding 7%, you'll pay $252 in federal taxes and receive $448 in income.
That same $10,000 invested in a tax-free bond fund yielding 5.5% would
allow you to keep $550 in income.
These are three investment strategies that could help lower your tax bill
in 1994. If you're interested in learning more, please call us at
1-800-544-8888 or visit a Fidelity Investor Center.
Wishing you a prosperous new year,
Edward C. Johnson 3d, Chairman
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage of change in value, the average annual
percentage change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (or income) and capital gains (the profits
the fund earns when it sells stocks that have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1993 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Contrafund 21.43% 224.37% 408.62%
Contrafund (incl. 3% sales charge) 17.78% 214.64% 393.36%
S&P 500(Registered trademark) 10.08% 97.26% 302.35%
Average Growth Fund 10.61% 99.76% 234.70%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one, five, or 10 years. For example, if
you had invested $1,000 in a fund that had a 5% return over the past year,
you would have $1,050. You can compare these figures to the performance of
the Standard & Poor's 500 Composite Stock Price Index - a common proxy
for the U.S. stock market. You can also compare them to the average growth
fund, which reflects the performance of over 488 growth funds tracked by
Lipper Analytical Services. Both benchmarks include reinvested dividends
and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1993 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Contrafund 21.43% 26.53% 17.66%
Contrafund (incl. 3% sales charge) 17.78% 25.77% 17.30%
S&P 500(Registered trademark) 10.08% 14.55% 14.94%
Average Growth Fund 10.61% 14.51% 12.38%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER 10 YEARS
Contrafund (022) S&P 500
12/31/83 9700.01 10000.00
01/31/84 9315.36 9944.00
02/29/84 8511.09 9593.97
03/31/84 8484.58 9759.95
04/30/84 8396.20 9852.67
05/31/84 7998.48 9306.83
06/30/84 8122.21 9508.79
07/31/84 7689.15 9390.88
08/31/84 8758.56 10428.57
09/30/84 8758.56 10430.66
10/31/84 8714.37 10471.34
11/30/84 8652.50 10354.06
12/31/84 8897.59 10627.40
01/31/85 9744.54 11455.28
02/28/85 9808.29 11596.18
03/31/85 9890.26 11604.30
04/30/85 9780.97 11593.85
05/31/85 9972.22 12263.98
06/30/85 10035.97 12456.52
07/31/85 10145.25 12437.84
08/31/85 10336.50 12332.11
09/30/85 9817.40 11946.12
10/31/85 10345.61 12498.03
11/30/85 10892.03 13355.39
12/31/85 11305.65 14001.80
01/31/86 11407.92 14080.21
02/28/86 12529.40 15133.40
03/31/86 13088.30 15977.85
04/30/86 12844.41 15797.30
05/31/86 13169.59 16637.72
06/30/86 13108.62 16918.89
07/31/86 12143.26 15973.13
08/31/86 12935.87 17158.33
09/30/86 12163.58 15739.34
10/31/86 12976.52 16647.50
11/30/86 12976.52 17052.03
12/31/86 12811.28 16617.21
01/31/87 14660.92 18855.54
02/28/87 15557.31 19600.34
03/31/87 15815.23 20166.79
04/30/87 15850.40 19987.30
05/31/87 15991.09 20161.19
06/30/87 16577.27 21179.33
07/31/87 17386.20 22253.12
08/31/87 18019.28 23083.17
09/30/87 17655.85 22577.65
10/31/87 12556.05 17714.42
11/30/87 11864.35 16254.75
12/31/87 12567.77 17491.74
01/31/88 13376.71 18228.14
02/29/88 13986.34 19077.57
03/31/88 14009.79 18488.08
04/30/88 14291.15 18693.29
05/31/88 14091.85 18855.92
06/30/88 14771.82 19721.41
07/31/88 14877.34 19646.47
08/31/88 14549.07 18978.49
09/30/88 15146.98 19786.97
10/31/88 15545.59 20337.05
11/30/88 15428.35 20046.23
12/31/88 15209.80 20397.04
01/31/89 16219.78 21890.10
02/28/89 16123.59 21345.04
03/31/89 16977.27 21842.38
04/30/89 18071.41 22976.00
05/31/89 19009.25 23906.53
06/30/89 18889.01 23770.26
07/31/89 20620.41 25916.71
08/31/89 21209.56 26424.68
09/30/89 21618.36 26316.34
10/31/89 20969.09 25705.80
11/30/89 21450.03 26230.20
12/31/89 21773.12 26859.73
01/31/90 20618.29 25057.44
02/28/90 21046.49 25380.68
03/31/90 21500.64 26053.27
04/30/90 21280.05 25401.94
05/31/90 23291.27 27878.62
06/30/90 23589.71 27689.05
07/31/90 23148.54 27600.44
08/31/90 21344.93 25105.36
09/30/90 20449.61 23882.73
10/31/90 20553.41 23780.04
11/30/90 21773.12 25316.23
12/31/90 22630.13 26022.55
01/31/91 24834.44 27157.13
02/28/91 26712.68 29098.87
03/31/91 28277.87 29803.06
04/30/91 28434.39 29874.59
05/31/91 30247.41 31165.17
06/30/91 28551.78 29737.81
07/31/91 30573.50 31123.59
08/31/91 32112.60 31861.22
09/30/91 32203.91 31329.13
10/31/91 33129.98 31748.94
11/30/91 31382.18 30469.46
12/31/91 35058.25 33955.17
01/31/92 36057.96 33323.60
02/29/92 37228.09 33756.81
03/31/92 36217.75 33098.55
04/30/92 36610.66 34071.65
05/31/92 37003.57 34238.60
06/30/92 36105.49 33728.44
07/31/92 37017.60 35107.94
08/31/92 36330.01 34388.23
09/30/92 36947.44 34794.01
10/31/92 37775.36 34915.79
11/30/92 39599.57 36106.41
12/31/92 40630.38 36550.52
01/31/93 41917.18 36857.55
02/28/93 42193.72 37358.81
03/31/93 44210.06 38147.08
04/30/93 44508.77 37223.92
05/31/93 46271.20 38221.52
06/30/93 46286.14 38332.36
07/31/93 46793.96 38179.04
08/31/93 49064.20 39626.02
09/30/93 49168.75 39320.90
10/31/93 49601.89 40134.84
11/30/93 47734.91 39753.56
12/31/93 49335.92 40234.58
$10,000 OVER 10 YEARS: Let's say you invested $10,000 in Fidelity
Contrafund on December 31, 1983, and paid a 3% sales charge. As the chart
shows, by December 31, 1993, the value of your investment would have grown
to $49,336 - a 393.36% increase on your initial investment. For comparison,
look at how the S&P 500 did over the same period. With dividends
reinvested, the same $10,000 investment would have grown to $40,235 - a
302.35% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
growth in the long run and
volatility in the short run. In
turn, the share price and
return of a fund that invests in
stocks will vary. That means if
you sell your shares during a
market downturn, you might
lose money. But if you can
ride out the market's ups and
downs, you may have a gain.
(checkmark)
DISTRIBUTIONS
The Board of Trustees of Fidelity <FUND> voted to pay on February 7,
1994, to shareholders of record at the opening of business on February 4,
1994, a distribution of $___ derived from capital gains realized from sales
of portfolio securities.
INVESTMENT CHANGES
TOP TEN STOCKS AS OF DECEMBER 31, 1993
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO
International Business Machines
Corp. 1.8 -
Citicorp 1.0 .5
British Petroleum PLC ADR 1.0 .4
United Technologies Corp. 1.0 -
Philip Morris Companies, Inc. .9 -
Anadarko Petroleum Corp. .9 .3
Lotus Development Corp. .9 .5
Columbia Healthcare Corp. .8 -
Ford Motor Co. .8 .3
Caterpillar, Inc. .8 .5
TOP FIVE INDUSTRIES AS OF DECEMBER 31, 1993
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE INDUSTRIES
6 MONTHS AGO
Technology 11.1 16.2
Energy 10.0 16.3
Media & Leisure 8.4 6.8
Health 7.2 1.8
Basic Industries 5.6 2.4
ASSET ALLOCATION
AS OF DECEMBER 31, 1993 * AS OF JUNE 30, 1993 *
Row: 1, Col: 1, Value: 19.1
Row: 1, Col: 2, Value: 1.5
Row: 1, Col: 3, Value: 40.1
Row: 1, Col: 4, Value: 40.0
Row: 1, Col: 1, Value: 15.9
Row: 1, Col: 2, Value: 1.5
Row: 1, Col: 3, Value: 40.0
Row: 1, Col: 4, Value: 43.3
Stocks 80.1%
Bonds 0.8%
Short-term and
other investments 19.1%
Stocks 83.3%
Bonds 0.8%
Short-term and
other investments 15.9%
* FOREIGN
INVESTMENTS 18.2%
* FOREIGN
INVESTMENTS 13.5%
INVESTMENTS DECEMBER 31, 1993
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 79.3%
SHARES VALUE (NOTE 1)
(000S)
AEROSPACE & DEFENSE - 1.4%
AEROSPACE & DEFENSE - 0.5%
Alliant Techsystems, Inc. (a) 172,800 $ 5,119 01880410
Greenwich Air Services, Inc. (a) 1,000 8 39678110
Martin Marietta Corp. 115,000 5,118 57290010
McDonnell Douglas Corp. 18,500 1,980 58016910
Precision Castparts Corp. 32,300 937 74018910
Sturm Ruger & Co., Inc. 638,900 15,892 86415910
Thiokol Corp. 102,500 2,716 88410310
31,770
DEFENSE ELECTRONICS - 0.9%
ESCO Electronics Corp. (trust receipt) (a)(e) 604,600 7,784 26903020
E-Systems, Inc. 12,600 547 26915730
Flir Systems, Inc. (a) 154,100 1,503 30244510
Loral Corp. 1,075,000 40,581 54385910
Tech-Sym Corp. (a) 242,600 5,186 87830810
Tracor, Inc. (a) 10,000 90 89234920
Trimble Navigation Ltd. (a) 12,200 108 89623910
55,799
TOTAL AEROSPACE & DEFENSE 87,569
BASIC INDUSTRIES - 5.6%
CHEMICALS & PLASTICS - 1.8%
Akzo NV Ord. 137,700 13,303 01019910
Cabot Corp. 206,000 11,098 12705510
Cambrex Corp. 370,200 7,404 13201110
Foamex International, Inc. (a) 355,000 6,035 34412310
GEON 223,300 5,275 37246W10
Georgia Gulf Corp. (a) 182,400 4,081 37320020
Hanna (M.A.) Co. 184,400 6,016 41052210
IMC Fertilizer Group, Inc. 30,585 1,388 44966910
Monsanto Co. 285,200 20,927 61166210
Sealed Air Corp. (a) 20,000 633 81211510
Terra Industries, Inc. (a) 458,800 3,498 88091510
Union Carbide Corp. 1,285,000 28,752 90558110
Vigoro Corp. 200,600 6,068 92675410
114,478
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
BASIC INDUSTRIES - CONTINUED
IRON & STEEL - 0.9%
Allegheny Ludlum Industries, Inc. 210,900 $ 5,035 01690010
Geneva Steel Class A (a) 97,100 1,651 37225210
Inland Steel Industries, Inc. (a) 255,400 8,460 45747210
Iscor Ltd. (a) 604,100 346 46499C22
LTV Corp. 492,100 7,935 50192110
Mueller Industries, Inc. (a) 350,800 12,453 62475610
Nucor Corp. 310,000 16,430 67034610
52,310
METALS & MINING - 0.4%
Alcan Aluminium Ltd. 220,000 4,619 01371610
Inco Ltd. 100,000 2,686 45325840
Noranda, Inc. 235,000 4,600 65542210
Phelps Dodge Corp. 50,000 2,437 71726510
Wolverine Tube, Inc. (a) 381,000 7,525 97809310
21,867
PAPER & FOREST PRODUCTS - 2.5%
Abitibi-Price Inc. 100,000 1,182 00368010
Domain Industries Ltd, Class B (non-vtg.) Series 2 300,000 4,227
25703930
Domtar Inc. (a) 1,311,100 8,307 25756110
Fletcher Challenge Canada Ltd. Class A 232,307 3,625 33932D10
Georgia-Pacific Corp. 250,000 17,187 37329810
IP Timberlands, Ltd. Class A 8,600 229 44984210
International Forest Products Class A (a) 600,400 9,766 45953E10
International Paper Co. 300,000 20,325 46014610
Longview Fibre Co. 454,300 10,279 54321310
Louisiana-Pacific Corp. 301,900 12,453 54634710
Metsa Serla B 246,000 9,889 59299992
Noranda Forest, Inc. 160,000 1,453 65542L10
Plum Creek Timber Co. LP (depositary unit) 83,900 2,192 72923710
Pope & Talbot, Inc. 97,300 2,797 73282710
Repola OY 723,200 11,242 75999A92
Riverside Forest Products 90,000 1,958 76890410
St. Joe Paper Co. 4,600 233 79016110
Scott Paper Co. 45,000 1,851 80987710
Slocan Forest Products Ltd. 353,800 8,934 83158C10
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
BASIC INDUSTRIES - CONTINUED
PAPER & FOREST PRODUCTS - CONTINUED
Temple-Inland, Inc. 327,500 $ 16,498 87986810
Timberwest Forest Ltd. (a)(f) 200,000 2,572 88690820
Union Camp Corp. 206,000 9,811 90553010
Willamette Industries, Inc. 26,700 1,322 96913310
158,332
TOTAL BASIC INDUSTRIES 346,987
CONGLOMERATES - 2.0%
CONGLOMERATES - 2.0%
Alexander & Baldwin, Inc. 10,000 268 01448210
Allied-Signal, Inc. 108,100 8,540 01951210
Canadian Pacific Ltd. Ord. 1,074,000 17,571 13644030
ITT Corp. 254,000 23,177 45067910
Litton Industries, Inc. (a) 100,000 6,438 53802110
Textron, Inc. 110,000 6,408 88320310
United Technologies Corp. 1,000,000 62,000 91301710
124,402
CONSTRUCTION & REAL ESTATE - 3.0%
BUILDING MATERIALS - 0.9%
Armstrong World Industries, Inc. 672,300 35,800 04247610
Lafarge Corp. 323,800 7,407 50586210
Lilly Industrial Coatings, Inc. Class A 175,400 4,210 53249110
Medusa Corp. 16,900 547 58507230
Southdown, Inc. (a) 99,600 2,440 84129710
Tecumseh Products Co. Class A 183,500 8,487 87889520
USG Corp. (a) 10,000 292 90329340
59,183
CONSTRUCTION - 1.5%
Butler Manufacturing Co. (Del) (a) 15,300 415 12365510
Centex Corp. 145,100 6,094 15231210
Clayton Homes, Inc. (a) 165,875 4,022 18419010
Continental Homes Holding Corp. (e) 400,600 9,214 21148C10
Kaufman & Broad Home Corp. (a) 260,000 6,175 48616810
Oakwood Homes Corp. 395,100 10,668 67409810
Pulte Corp. 173,800 6,300 74586710
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONSTRUCTION & REAL ESTATE - CONTINUED
CONSTRUCTION - CONTINUED
Redman Industries (a) (e) 376,700 $ 7,628 75764210
Schuler Homes, Inc. (a) 856,100 23,971 80818810
Southern Energy Homes, Inc. (a) 166,000 3,133 84281410
Standard Pacific Corp. 434,300 4,832 85375C10
Toll Brothers, Inc. (a) 463,600 7,939 88947810
90,391
ENGINEERING - 0.2%
CBI Industries, Inc. 215,300 6,540 12480010
Corrpro Companies, Inc. (a) 12,000 232 22031710
Insituform Mid-America, Inc. Class A 160,000 2,240 45766H10
Rust International, Inc. (a) 10,000 228 78307510
SNC Group, Inc. Class A 95,000 1,348 78460T10
10,588
REAL ESTATE - 0.0%
Hovnanian Enterprises, Inc. Class A (a) 133,900 2,025 44248720
REAL ESTATE INVESTMENT TRUSTS - 0.4%
Equity Residential Property Trust, shares beneficial interest 85,000
2,709 29476L10
Manufactured Home Community 122,800 5,281 56468210
McArthur/Glen Realty Corp. (a) 85,800 2,091 57918810
Nationwide Health Properties, Inc 22,900 813 63862010
Simon Properties Group, Inc. (a) 539,000 12,195 82880510
23,089
TOTAL CONSTRUCTION & REAL ESTATE 185,276
DURABLES - 5.3%
AUTOS, TIRES, & ACCESSORIES - 3.2%
Chrysler Corp. 650,100 34,618 17119610
Custom Chrome, Inc. (a) 116,900 2,601 23190510
Echlin, Inc. 80,000 2,660 27874910
Federal-Mogul Corp. 380,000 11,020 31354910
Ford Motor Co. 795,200 51,290 34537010
General Motors Corp. 685,000 37,589 37044210
Goodyear Tire & Rubber Co. 900,000 41,175 38255010
Jason, Inc. (a) 95,000 1,259 47117110
Smith (A.O.) Corp. Class B 96,900 3,464 83186520
Spartan Motors, Inc. 88,050 1,497 84681910
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
DURABLES - CONTINUED
AUTOS, TIRES, & ACCESSORIES - CONTINUED
Titan Wheel International, Inc. (a) 76,800 $ 1,958 88832810
Wabash National Corp. 266,600 9,065 92956610
198,196
CONSUMER ELECTRONICS - 0.3%
Aktiebolaget Electrolux 346,000 11,778 01019810
Fedders USA Inc. (a) 223,600 1,425 31313510
Harman International Industries, Inc. (a) 163,000 4,686 41308610
Whirlpool Corp. 71,500 4,755 96332010
22,644
HOME FURNISHINGS - 0.4%
Ethan Allen Interiors, Inc. (a) 119,900 3,747 29760210
Haverty Furniture Companies, Inc.(e) 530,300 9,081 41959610
Haverty Furniture Companies, Inc. Class A 52,350 877 41959620
Miller (Herman), Inc. 60,100 1,841 60054410
Rhodes, Inc. (a) 449,000 7,521 76235P10
Rowe Furniture Corp. 16,200 344 77952810
23,411
TEXTILES & APPAREL - 1.4%
Donnkenny, Inc. (Del.) (a) (e) 328,300 6,149 25800610
Forstmann & Co., Inc. (a) (e) 281,400 3,236 34659270
Haggar Corp. 20,000 510 40517310
Kellwood Co. 224,800 9,020 48804410
Mohawk Industries, Inc. (a) 201,400 6,898 60819010
Nantucket Industries, Inc. (a)(e) 165,000 1,072 63018310
Nine West Group, Inc. (a) 958,500 28,276 65440D10
Orbit Instrument Corp. (a) 306,100 1,416 68555910
Oshkosh B'Gosh, Inc. Class A 113,400 2,211 68822220
Stride Rite Corp. 814,000 13,329 86331410
Tandy Brands Accessories, Inc. (a) 172,300 3,403 87537810
Unifi, Inc. 309,100 8,307 90467710
Vista Resources, Inc. (a) 113,000 2,444 92838410
Westpoint Stevens, Inc. Class A (a) 10,000 188 96123810
86,459
TOTAL DURABLES 330,710
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
ENERGY - 10.0%
ENERGY SERVICES - 2.0%
Chiles Offshore Corp. (a) 1,234,000 $ 6,170 16888710
Energy Service, Inc. (a) 7,516,900 24,430 29271910
Global Marine, Inc. (a) 4,420,700 18,235 37935240
Halliburton Co. 200,000 6,375 40621610
Marine Drilling Companies, Inc. (a) 1,248,800 7,180 56824020
Nabors Industries, Inc. (a) 894,700 7,046 62956810
Nowsco Well Service Ltd. 361,000 5,189 67012210
Offshore Logistics, Inc. (a) 430,000 5,912 67625510
Offshore Pipelines, Inc. (a)(e) 631,100 9,940 67626910
Rowan Companies, Inc. (a) 165,900 1,493 77938210
Schlumberger Ltd. 200,000 11,825 80685710
Smith International, Inc. (a) 547,300 4,789 83211010
Tuboscope Vetco Corp. (a) 469,200 2,874 89860010
Weatherford International, Inc. (a) 787,500 8,367 94707610
Wheatley TXT Corp. 60,000 683 96271810
120,508
OIL & GAS - 8.0%
Amerada Hess Corp. 390,900 17,639 02355110
Anadarko Petroleum Corp. 1,211,400 54,967 03251110
Anderson Exploration Ltd. (a) 101,000 2,207 03390110
Apache Corp. 13,000 304 03741110
Ashland Oil, Inc. 135,900 4,638 04454010
Beau Canada Exp. 1,946,300 3,461 07428010
Benton Oil & Gas Co. (a) 455,000 2,275 08328810
Blue Range Resource Corp. Class A (a) 290,500 2,143 09579K10
British Borneo Petroleum 240,800 697 11099D22
British Petroleum PLC ADR 985,900 63,098 11088940
Brown Tom, Inc. (a) (e) 883,300 9,937 11566020
Burlington Resources, Inc. 680,000 28,815 12201410
Cabot Oil & Gas Corp. Class A 307,800 6,502 12709710
Cabre Exploration Ltd. (a) 76,600 797 12690610
Canadian Natural Resources Ltd. (a) 2,446,300 33,315 13638510
Chauvco Resources Ltd. Class A (a) 500,000 6,526 16260010
Clyde Petroleum (a) 5,100,000 3,465 18958499
DEKALB Energy Corp. Class B (a) 102,500 1,409 24487410
Encal Energy Ltd. (a) 535,000 1,842 29250D10
Enron Oil & Gas Co. 155,300 6,057 29356210
Excel Energy, Inc. (a) 76,600 319 30065410
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
ENERGY - CONTINUED
OIL & GAS - CONTINUED
Grad & Walker Energy Corp.(e) 636,100 $ 6,016 38391010
HS Resources, Inc. (a)(e) 623,000 13,083 40429710
Horsham Corp. 1,024,000 15,010 44090710
Intensity Resources Ltd. (a) 988,700 2,020 45816E10
Inverness Petroleum Ltd. (a) 986,000 7,273 46190810
Jordan Petroleum Ltd. Class A (a) 472,800 3,219 48076110
Kerr-McGee Corp. 124,900 5,636 49238610
Louis Dreyfus Natural Gas Corp. (a) 192,900 3,086 54601110
Louisiana Land & Exploration Co. 39,800 1,597 54626810
Mitchell Energy & Development Corp. Class A 57,700 1,255 60659220
Murphy Oil Corp. 726,500 29,060 62671710
Newfield Exploration Co. (a) 70,600 1,244 65129010
Noble Affiliates, Inc. 667,300 17,683 65489410
Norsk Hydro AS ADR (a) 113,600 3,181 65653160
Northrock Resources Ltd. (a) 518,300 2,990 66679810
Northstar Energy Corp. (a) 378,000 7,436 66703R10
Nuevo Energy Corporation (a) 116,800 2,278 67050910
Paramount Resources Ltd. (a) 142,000 2,108 69932010
Parker & Parsley Petroleum Co. 380,500 9,417 70101810
Petromet Resources Ltd. Ord. (a) 668,600 3,162 71673110
Phillips Petroleum Co. 525,000 15,225 71850710
Pinnacle Resources Ltd. (a) 350,000 4,766 72348R10
Poco Petroleums Ltd. (a) 291,700 1,959 73036110
Renaissance Energy Ltd. (a) 936,600 20,018 75966610
Rio Alto Exploration Ltd. (a) 1,738,300 10,850 76689210
Sceptre Resources Ltd. 479,600 4,626 80621470
Snyder Oil Corp. 115,600 2,052 83348210
Summit Resources Ltd. 322,000 2,101 86624610
Sun Company, Inc. 49,200 1,445 86676210
Tarragon Oil & Gas Ltd. (a) 515,000 6,721 87629E20
Tri Link Resources Ltd. Class A (a) 85,000 900 89557D10
United Meridian Corp. (a) 85,300 1,162 91086510
Unocal Corp. 1,250,000 34,844 91528910
Vintage Petroleum, Inc. 390,900 7,085 92746010
500,921
TOTAL ENERGY 621,429
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - 2.9%
BANKS - 2.2%
Allied Irish Bank 3,500,000 $ 15,043 01908810
Bank International Indonesia Ord. (a) 1,000,000 4,902 06199B92
Bank of New York Co., Inc. 31,000 1,767 06405710
Bank South Corp. 268,300 4,091 06506810
Citicorp (a) 1,755,000 64,496 17303410
Dresdner Bank AG Ord. 40,000 10,655 26156110
HUBCO, Inc. 155,940 3,508 40438210
Integra Financial Corp. 247,900 10,660 45810410
Liberty Bancorporation, Inc. 12,100 339 53017510
National Westminster Bank PLC Ord. 900,000 8,242 63853930
North Fork Bancorporation, Inc. (a) 116,800 1,504 65942410
Shawmut National Corp. 102,000 2,218 82048410
Signet Banking Corp. 1,031 36 82668110
Westpac Banking Corp. 3,274,200 10,294 96121410
137,755
CLOSED END INVESTMENT COMPANY - 0.3%
Free State Consolidated Gold Mines Ltd. ADR 276,800 4,706 35614220
Korea Fund, Inc. (a) 50,000 1,200 50063410
Orange Free State Investments Ltd. ADR 228,400 10,050 68486520
15,956
CREDIT & OTHER FINANCE - 0.3%
Argentaria Corp. Bancaria de Esp. (a) 327,525 13,819 21991392
Gencor Ltd. (Reg.) (a) 1,700,000 3,428 36868193
Mercer International, Inc. SBI (a) 185,000 2,613 58805610
Mercury Finance Co. 13,800 264 58939510
20,124
SAVINGS & LOANS - 0.1%
Crossland Federal Savings Bank, Brooklyn, NY (a) 200,000 5,600 22764B10
Progressive Bancorporation Inc. 21,200 350 74331310
Standard Federal Bank 100,000 3,000 85338910
8,950
TOTAL FINANCE 182,785
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HEALTH - 7.2%
DRUGS & PHARMACEUTICALS - 3.5%
Astra A Free 1,000,000 $ 22,772 04632292
COR Therapeutics, Inc. (a) 235,400 3,560 21775310
Cellpro, Inc. (a) 453,900 15,773 15115610
Celtrix Laboratories, Inc. (a) 245,000 2,695 15118610
Chiron Corp. (a) 285,000 23,940 17004010
Cocensys, Inc. (a) 36,500 146 19126310
Collagen Corp. (a) 25,000 694 19419410
Cytotheraputics, Inc. (a) 196,300 2,405 23292310
Elan PLC ADR (a) 676,700 28,675 28413120
Genentech, Inc. (a) 346,200 17,483 36871020
Genetics Institute, Inc. (depositary share) 30,700 1,481 37185530
Magainin Pharmaceuticals, Inc. (a) 247,000 3,396 55903610
Merck & Co., Inc. 1,107,468 38,069 58933110
Nature's Bounty, Inc. (a)(e) 10,000 208 63901730
Perspective Biosystems, Inc. (a) 109,800 3,157 71527110
Pfizer, Inc. 547,900 37,805 71708110
Protein Design Labs, Inc. (a) 169,700 4,115 74369L10
Repligen Corp. (a) 150,000 1,031 75991610
Rexall Sundown, Inc. (a) 20,000 300 76164810
Schering-Plough Corp. 130,000 8,905 80660510
Sciclone Pharmaceuticals, Inc. (a) 107,600 2,475 80862K10
219,085
MEDICAL EQUIPMENT & SUPPLIES - 1.2%
Cardinal Distribution, Inc. 432,300 20,534 14148710
Cordis Corp. (a) 173,300 8,557 21852510
FoxMeyer Corp. 225,600 2,566 35165410
Herbalife International, Inc. 10,000 177 42690810
Kendall International, Inc. (a) 40,000 1,840 48875110
Kirschner Medical Corp. (a) 30,000 195 49766010
Maxxim Medical, Inc. (a) 48,900 984 57777G10
McKesson Corp. 40,200 2,171 58155610
Medtronic, Inc. 310,000 25,459 58505510
Owens & Minor, Inc. 35,300 812 69073010
Patterson Dental Co. (a) 176,200 5,727 70341210
Sybron Corp. (a) 75,300 2,410 87114F10
Thermedics, Inc. (a) 55,750 843 88390110
72,275
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HEALTH - CONTINUED
MEDICAL FACILITIES MANAGEMENT - 2.5%
Abbey Healthcare Group, Inc. (a) 173,200 $ 4,806 00278610
America Medical Holdings, Inc. (a) 20,000 383 02742810
Columbia Healthcare Corp. 1,584,965 52,700 19767910
HEALTHSOUTH Rehabilitation Corp. (a) 505,700 12,769 42192410
Health Management Associates, Inc. Class A (a) 940,450 27,508 42193310
Homecare Management, Inc. (a) 320,000 4,360 43738620
Lincare Holdings, Inc. (a) 200,300 4,982 53279110
Multicare Companies, Inc. (a) 80,800 1,475 62543V10
Rehabcare Corp. (a)(e) 227,000 2,554 75914810
U.S. Healthcare, Inc. 571,700 32,944 91191010
United HealthCare Corp. 200,000 15,175 91058110
Universal Health Services, Inc. Class B (a) 3,500 72 91390310
159,728
TOTAL HEALTH 451,088
INDUSTRIAL MACHINERY & EQUIPMENT - 2.3%
ELECTRICAL EQUIPMENT - 0.7%
BMC Industries, Inc. (a) 127,400 2,691 05560710
California Microwave Corp. (a) 1,400 34 13044210
General Electric Co. 125,000 13,109 36960410
Itel Corp. (a) 77,500 2,170 46564210
Philips NV (a) 775,000 15,985 71833750
Roper Industries, Inc. 195,600 6,357 77669610
Willcox & Gibbs, Inc. (a) 360,300 2,792 96920710
Yurtec Corp. (a) 16,650 381 97299492
43,519
INDUSTRIAL MACHINERY & EQUIPMENT - 1.2%
Astec Industries, Inc. (a) 419,100 6,444 04622410
Bearings, Inc. 400 11 07400520
CMI Corp. Oklahoma Class A 785,300 5,399 12576130
Caterpillar, Inc. 550,000 48,950 14912310
Dover Corp. 36,000 2,187 26000310
FSI International, Inc. (a) 10,000 120 30263310
Indresco, Inc. (a) 304,000 4,712 45590510
JLG Industries, Inc. 15,000 371 46621010
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
Park-Ohio Industries, Inc. (a) 343,200 $ 4,419 70067710
Regal-Beloit Corp. 80,500 2,123 75875010
TRINOVA Corp. 42,600 1,337 89667810
76,073
POLLUTION CONTROL - 0.4%
Allied Waste Industries, Inc. (a) 20,000 105 01958930
Envirotest Systems Corp. (a) 12,000 258 29409W10
Harding Associates, Inc. (a) 38,800 349 41226410
OHM Corp.(a) 1,353,500 15,734 67083910
Sanifill, Inc. (a) 127,400 2,771 80101810
TRC Companies, Inc. (a) 20,000 215 87262510
United Waste Systems, Inc. (a) 347,400 5,385 91317410
24,817
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 144,409
MEDIA & LEISURE - 8.4%
BROADCASTING - 3.7%
Adelphia Communications Class A (a) 32,000 600 00684810
BET Holdings, Inc. Class A (a) 20,000 395 08658510
Broadcasting Partners, Inc. Class A (a)(e) 439,200 6,917 11131910
CBS, Inc. 60,000 17,310 12484510
Capital Cities/ABC, Inc. 60,000 37,170 13985910
Clear Channel Communications, Inc. (a) 464,000 21,344 18450210
Comcast Corp. Class A (special) 339,800 12,233 20030020
EZ Communications, Inc. (a) 294,200 4,634 26928810
Heritage Media Corp. Class A (a) 762,800 15,161 42724120
Home Shopping Network, Inc. 1,796,500 26,723 43735110
Infinity Broadcasting Corp. (a) 210,842 6,378 45662610
Jacor Communications, Inc. Class A 603,000 8,668 46985840
Liberty Media Corp. Class A (a) 125,000 3,640 53071530
Saga Communications, Inc. Class A (a) (e) 327,800 5,614 78659810
Scandinavian Broadcasting Corp. (a) 40,000 840 80699E92
TCA Cable TV, Inc. 60,000 1,710 87224110
Tele-Communications, Inc. Class A (a) 883,900 26,738 87924010
Time Warner, Inc. 775,944 34,335 88731510
230,410
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - CONTINUED
ENTERTAINMENT - 0.5%
Cedar Fair LP (depositary units) 60,500 $ 2,125 15018510
Disney (Walt) Co. 10,000 426 25468710
Players International, Inc. (a) 332,900 8,239 72790310
PolyGram N.V. ADR 315,000 12,403 73173310
Royal Caribbean Cruises Ltd. 440,000 11,770 78015392
34,963
LEISURE DURABLES & TOYS - 0.7%
ARCTCO, Inc. 525,200 12,605 03966510
Authentic Fitness Corp. (a) 12,100 340 05266110
Fleetwood Enterprises, Inc. 160,300 3,807 33909910
Hasbro, Inc. 270,000 9,788 41805610
Mattel, Inc. 440,175 12,160 57708110
Thor Industries, Inc. 106,100 2,732 88516010
41,432
LODGING & GAMING - 2.4%
Autotote Corp. Class A (a) 10,000 220 05332310
Genting BHD (ML EX) 677,000 9,424 37245210
Grand Palais Enterprises, Inc. (a)(g) 398,400 6,597 38699522
Hilton Hotels Corp. 221,400 13,450 43284810
Hong Kong & Shanghai Hotels 9,000,000 17,354 71899292
Hospitality Franchise Systems, Inc. (a) 785,300 41,719 44091210
La Quinta Motor Inns, Inc. 464,250 16,365 50419510
Lottery Enterprises, Inc. (a) 25,000 413 54569410
Marriott International, Inc. 400,000 11,600 57190010
Mirage Resorts, Inc. (a) 483,350 11,540 60462E10
Station Casinos, Inc. (a) 212,500 4,197 85768910
WMS Industries, Inc. (a) 518,900 14,918 92929710
147,797
PUBLISHING - 0.7%
American Greetings Corp. Class A 95,200 3,237 02637510
Belo (A.H.) Corp. Class A 111,700 5,920 08055510
Enquirer/Star Group, Inc. Class A 283,400 5,385 29355410
Gannett Co., Inc. 250,000 14,313 36473010
Harte Hanks Communications, Inc. (a) 40,000 780 41619610
MaClean Hunter Ltd. 463,300 4,425 55474980
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - CONTINUED
PUBLISHING - CONTINUED
Meredith Corp. 263,600 $ 10,544 58943310
Park Communications, Inc. (a) 90,000 1,890 70025210
Score Board, Inc. (a) 25,000 459 80917320
46,953
RESTAURANTS - 0.4%
Consolidated Products, Inc. (a) 224,030 2,240 20979810
Ground Round Restaurants, Inc. (a) (e) 755,200 5,947 39942710
IHOP Corp. (a) 309,500 8,976 44962310
McDonald's Corp. 50,000 2,850 58013510
Quantum Restaurant Group, Inc. (a) 153,100 1,875 74763T10
Shoney's, Inc. (a) 110,000 2,544 82503910
Uno Restaurant Corp. (a) 27,700 270 91490010
24,702
TOTAL MEDIA & LEISURE 526,257
NONDURABLES - 3.7%
AGRICULTURE - 0.1%
Pioneer Hi-Bred International, Inc. 119,700 4,668 72368610
BEVERAGES - 0.6%
Canadaigua Wine Co. Class A (a) 406,900 12,817 13721920
Coca-Cola Bottling Co. Consolidated 10,100 369 19109810
Dr. Pepper/Seven-Up Companies, Inc. (a) 1,110,000 26,640 25613130
39,826
FOODS - 0.6%
CPC International, Inc. 295,700 14,083 12614910
Chock Full-O-Nuts Corp. 498,000 3,984 17026810
Dean Foods Co. 137,800 4,496 24236110
IBP, Inc. 529,600 13,703 44922310
Michael Foods, Inc. 20,000 160 59407410
Pet, Inc. 125,400 2,195 71582510
38,621
HOUSEHOLD PRODUCTS - 1.3%
DEP Corp. Class A (a) 406,000 2,132 23320220
Gillette Company 750,800 44,766 37576610
Paragon Trade Brands, Inc. (a) 332,600 9,812 69912K10
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONDURABLES - CONTINUED
HOUSEHOLD PRODUCTS - CONTINUED
Premark International, Inc. 160,000 $ 12,840 74045910
Safeskin Corp. 431,900 6,910 78645410
Stanhome, Inc. 202,100 6,846 85442510
83,306
TOBACCO - 1.1%
Philip Morris Companies, Inc. 1,000,000 55,750 71815410
RJR Nabisco Holdings Corp. (a) 1,782,700 11,365 74960K10
67,115
TOTAL NONDURABLES 233,536
PRECIOUS METALS - 3.4%
PRECIOUS METALS - 3.4%
Agnico Eagle Mines Ltd. 167,900 2,191 00847410
American Barrick Resources Corp. 830,000 23,627 02451E10
Anglo American Corp. South Africa:
(Reg.) 57,600 2,947 03486110
ADR (a) 159,400 8,349 03486130
Cambior Inc. 791,400 11,975 13201L10
Euro-Nevada Mining Corp. 511,500 18,237 29870P10
Franco Nevada Mining Corp. 276,000 19,002 35186010
Golden Star Resources, Ltd. Canada (a) 362,200 4,864 38119T10
Homestake Mining Co. 1,500,000 33,000 43761410
Newmont Mining Corp. 365,000 21,033 65163910
Placer Dome Inc. 1,015,000 25,245 72590610
St. Helena Gold Mines Ltd. Ord. 11,300 116 78967010
TVX Gold, Inc. (a) 400,000 2,648 87308K10
Vaal Reefs Exploration & Mining Co. Ltd. ADR 29,200 296 91850640
Western Deep Levels Ltd. ADR 380,000 18,430 95807720
Western Mining Corp. Holdings Ltd 3,000,000 14,342 95869410
Zapopan NL (a) 4,298,500 8,698 98999293
215,000
RETAIL & WHOLESALE - 3.6%
APPAREL STORES - 0.8%
AnnTaylor Stores Corp. (a) 414,800 10,266 03611510
Filene's Basement Corp. (a) 337,200 3,667 31686610
Gap, Inc. 650,000 25,594 36476010
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - CONTINUED
APPAREL STORES - CONTINUED
Merry-Go-Round Enterprises, Inc. 650,000 $ 2,194 59043610
Petrie Stores Corp. 138,500 4,034 71643410
Sportmart, Inc. (a) 35,000 621 84892210
Talbots, Inc. 1,000 26 87416110
United States Shoe Corp. 280,000 4,200 91260510
50,602
APPLIANCE STORES - 0.2%
Cellstar Corp. (a) 674,500 11,298 15092510
GENERAL MERCHANDISE STORES - 0.9%
Hills Stores Co. (a) 8,000 163 43169210
Hudsons Bay Co. Ord. 284,500 8,502 44420410
Kohls Corp. (a) 600 30 50025510
Neiman-Marcus Group, Inc. 397,800 7,459 64020410
Penney (J.C.) Co., Inc. 300,000 15,712 70816010
Price/Costco, Inc. 1,050,000 20,213 74143W10
Value City Department Stores, Inc. (a) 68,700 1,005 92038710
53,084
GROCERY STORES - 0.4%
Food Lion, Inc. Class A 201,600 1,310 34477520
Ingles Markets, Inc. Class A 87,900 967 45703010
Pick N Pay Stores Ltd. (a) 998,000 3,024 72199422
Richfood Holdings, Inc. Class A 767,000 13,423 76340810
Ruddick Corp. 20,000 463 78125810
Rykoff-Sexton, Inc. 236,300 5,169 78375910
24,356
RETAIL & WHOLESALE, MISC - 1.3%
Amway Asia Pacific Ltd. (a) 10,500 374 03299H22
50-Off Stores, Inc. (a) 477,000 3,279 31681110
Fabri-Centers of America, Inc. (a) 174,200 3,266 30284610
Fingerhut Companies, Inc. 45,500 1,280 31786710
Friedmans, Inc. Class A (a) 125,000 1,719 35843810
Futures Shops Ltd. 97,000 2,275 36091310
Good Guys, Inc. (a) 89,300 1,161 38209110
Lowe's Companies, Inc. 410,000 24,293 54866110
Luria (L.) & Son, Inc. (a) 251,900 3,778 55048410
Musicland Stores Corp. 515,000 10,686 62758B10
Office Depot, Inc. (a) 225,000 7,566 67622010
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - CONTINUED
RETAIL & WHOLESALE, MISC - CONTINUED
Toys "R" Us, Inc. (a) 500,000 $ 20,437 89233510
Wickes Lumber Co. (a) 150,000 2,681 96744610
82,795
TOTAL RETAIL & WHOLESALE 222,135
SERVICES - 2.1%
ADVERTISING - 0.2%
Foote Cone & Belding Communications, Inc. 13,300 639 34487210
Regal Communication Corp. (a) (e) 1,837,900 7,696 75875630
8,335
LEASING & RENTAL - 0.0%
Agency Rent-A-Car, Inc. (a) 167,500 2,198 00845010
PRINTING - 0.4%
Cadmus Communications Corp. 140,700 1,970 12758710
Cryk, Inc. (a) 50,000 1,150 23281710
Moore Corporation Ltd. 660,000 12,733 61578510
Reynolds & Reynolds Co. Class A 160,600 7,327 76169510
Valassis Communications, Inc. 69,400 928 91886610
Wallace Computer Services, Inc. 68,600 2,324 93227010
26,432
SERVICES - 1.5%
Barefoot, Inc. (a) 225,700 7,787 06751210
Block (H&R), Inc. 60,000 2,445 09367110
CDI Corp. (a) 254,200 3,177 12507110
Catalina Marketing Corp. (a) 6,500 325 14886710
Ecolab, Inc. 164,600 7,407 27886510
Fair Issac & Company, Inc. 70,000 1,575 30325010
Franklin Quest Co. (a) 175,400 6,183 35459610
Medaphis Corp. 350,200 11,557 58402810
Michael Anthony Jewelers, Inc. (a)(e) 500,000 4,187 59406010
Oroamerica, Inc. (a) 82,700 1,241 68702710
Pittston Company Services Group 1,084,100 31,303 72570110
Robert Half International, Inc. (a) 428,700 11,253 77032310
Service Corp. International 110,000 2,888 81756510
91,328
TOTAL SERVICES 128,293
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - 11.0%
COMMUNICATIONS EQUIPMENT - 1.3%
Cisco Systems, Inc. (a) 224,300 $ 14,495 17275R10
DSC Communications Corp. (a) 30,000 1,845 23331110
Harmon Industries, Inc. (a)(e) 150,500 3,461 41313610
Inter-Tel, Inc. (a) 766,900 6,710 45837210
Lo Jack Corp. (a) 120,000 825 53945110
MB Communications, Inc. (a) (e) 1,024,600 21,773 55262M10
Porta Systems Corp. (e) 433,200 4,278 73564710
3Com Corp. (a) 337,800 15,877 88553510
VMX, Inc. (a) 1,123,000 4,352 91827610
Wellfleet Communications, Inc. (a) 140,000 9,030 94949710
82,646
COMPUTER SERVICES & SOFTWARE - 2.7%
ASK Computer Systems, Inc. (a) 25,000 328 00190310
Adobe Systems, Inc. 202,300 4,501 00724F10
BancTec, Inc. (a) 153,500 3,722 05978410
Computer Associates International, Inc. 239,600 9,584 20491210
CompuCom Systems, Inc. (a) 339,500 1,379 20478010
Electronic Arts (a) 30,000 900 28551210
Electronic Information Systems, Inc. (a) 277,800 3,681 28573810
Equifax Inc. 640,000 17,520 29442910
Government Technology Services, Inc. (a) 50,300 641 38375010
HBO & Co. 1,000 46 40410010
Intelligent Electronics, Inc. 62,200 1,703 45815710
KnowledgeWare, Inc. (a) 400,000 6,150 49924510
Lotus Development Corp. (a) 988,000 54,340 54570010
Micrografx, Inc. (a) 150,000 1,359 59507710
Microsoft Corp. (a) 316,700 25,534 59491810
Payco American Corp. (a) 27,500 289 70432710
SafeCard Services, Inc. 733,500 13,845 78642110
State of The Art, Inc. (a) 426,400 3,145 85730710
Sterling Software, Inc. (a) 68,800 1,952 85954710
Stratacom, Inc. (a) 457,500 7,663 86268310
Symantec Corp. (a) 35,000 639 87150310
Systems & Computer Technology Corp. 40,000 720 87187310
VMark Software, Inc. (a)(e) 455,600 6,492 92856110
Warner Insurance Services, Inc. (e) 440,950 2,205 93446710
168,338
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
COMPUTERS & OFFICE EQUIPMENT - 5.7%
ADAPTEC, Inc. (a) 105,000 $ 4,174 00651F10
AST Research, Inc. (a) 850,000 19,338 00190710
Amdahl Corp. 1,509,600 9,058 02390510
Compaq Computer Corp. (a) 525,000 38,850 20449310
Creative Technologies, Corp. (a) 193,900 6,156 22599992
Dell Computer Corporation (a) 733,200 16,589 24702510
Diebold, Inc. 337,300 20,322 25365110
Digital Biometrics, Inc. (a) 206,200 2,681 25383310
Exabyte (a) 325,900 5,744 30061510
Hewlett-Packard Co. 325,700 25,730 42823610
Hutchinson Technology, Inc. (a) 15,500 453 44840710
International Business Machines Corp. 2,016,500 113,932 45920010
Itron, Inc. (a) 50,000 900 46574110
Media Vision Technology, Inc. 485,900 21,258 58445H10
Merisel, Inc. (a) 261,400 4,803 58984910
Micropolis Corp. (a) 612,300 4,286 59490710
Miltope Group, Inc. (a)(e) 384,700 1,587 60219110
NAI Technologies, Inc. (a) 260,000 1,690 62872H10
Norand Corp. (a) 12,500 341 65542110
Photonics Corp. (a) (e) 222,500 1,391 71937W10
Quantum Corp. (a) 337,000 4,760 74790610
Seagate Technology (a) 6,700 159 81180410
Sequent Computer Systems, Inc. (a) 500,000 7,625 81733810
Sun Microsystems, Inc. (a) 216,700 6,311 86681010
Symbol Technologies, Inc. (a) 290,000 5,256 87150810
Syquest Technology, Inc. (a) (e) 610,800 6,261 87166010
Tech Data Corp. (a) 110,000 3,960 87823710
Xerox Corp. 250,000 22,344 98412110
Xylogics, Inc. (a) (e) 70,000 1,155 98415210
357,114
ELECTRONIC INSTRUMENTS - 0.0%
Fisher Scientific International, Inc. 50,000 1,769 33803210
ELECTRONICS - 1.3%
Analog Devices, Inc. (a) 20,000 493 03265410
Dovatron International, Inc. (a)(e) 414,300 11,393 25985910
Intel Corp. 225,000 13,950 45814010
International Rectifier Corp. (a) 368,400 5,158 46025410
LSI Logic Corp. (a) 301,200 4,819 50216110
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
ELECTRONICS - CONTINUED
Linear Technology Corp. 109,800 $ 4,255 53567810
Maxim Integrated Products, Inc. (a) 54,900 2,628 57772K10
Motorola, Inc. 110,000 10,161 62007610
Photronics, Inc. (a) 47,500 760 71940510
Samsung Electronics Co. Ltd. GDR (a)(f) 6,574 222 79605030
Sanmina Corp. (a) 369,600 9,887 80090710
Solectron Corp. (a) 50,000 1,419 83418210
Storage Technology Corp. (a) 55,000 1,739 86211120
Texas Instruments, Inc. 174,400 11,074 88250810
77,958
TOTAL TECHNOLOGY 687,825
TRANSPORTATION - 4.3%
AIR TRANSPORTATION - 1.0%
AMR Corp. (a) 245,000 16,415 00176510
Comair Holdings, Inc. 123,300 2,820 19978910
Mesa Airlines, Inc. (a) 50,000 888 59048110
Southwest Airlines Co. 20,000 750 84474110
UAL Corp. (a) 273,100 39,873 90254910
60,746
RAILROADS - 2.2%
Burlington Northern, Inc. 425,000 24,597 12189710
CSX Corp. 413,200 33,469 12640810
Chicago & North Western Holdings Corp. (a) 170,000 4,250 16715510
Conrail, Inc. 344,100 23,012 20836810
Illinois Central Corp., Series A 186,500 6,690 45184110
Santa Fe Pacific Corp. 1,507,300 33,537 80218310
Southern Pacific Rail Corp. (a) 120,000 2,370 84358410
Trinity Industries, Inc. 89,850 3,875 89652210
Wisconsin Central Transportation Corp. (a) 153,100 9,148 97659210
140,948
TRUCKING & FREIGHT - 1.1%
Airborne Freight Corp. 104,000 3,653 00926610
American Freightways Corp. (a) 22,500 444 02629V10
Consolidated Freightways, Inc. (a) 1,077,300 25,451 20923710
Federal Express Corp. (a) 445,000 31,539 31330910
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TRANSPORTATION - CONTINUED
TRUCKING & FREIGHT - CONTINUED
Frozen Food Express Industries, Inc. 41,333 $ 754 35936010
Harper Group 57,500 1,035 41345910
Landstar System, Inc. (a) 187,100 4,140 51509810
Swift Transportation Co., Inc. (a) 22,500 484 87075610
TNT Freightways Corp. 31,950 863 87259J10
Werner Enterprises, Inc. 31,100 949 95075510
69,312
TOTAL TRANSPORTATION 271,006
UTILITIES - 3.1%
CELLULAR - 0.7%
BCE Mobile Communications, Inc. 200,000 6,261 05534G10
Cellular, Inc. (a) 10,000 175 15116310
LIN Broadcasting Corp. (a) 31,300 3,459 53276310
Metrocall, Inc. (a) 30,700 537 59164710
Rogers Cantel Mobile Communications, Inc.
Class B (non-vtg.) (a) 438,000 11,764 77510210
Rogers Communications, Inc. Class B (a) 204,100 3,378 77510920
Vodafone Group PLC 2,450,000 21,477 92857T92
47,051
ELECTRIC UTILITY - 1.6%
Baltimore Gas & Electric Co. 50,000 1,269 05916510
Central & South West Corp. 278,900 8,437 15235710
DPL, Inc. 32,400 668 23329310
DQE, Inc. 91,200 3,146 23329J10
Entergy Corp. 789,900 28,436 29364F10
General Public Utilities Corp. 40,000 1,235 37055010
Gulf States Utilities Corp. (a) 816,800 16,336 40255010
Houston Industries, Inc. 259,400 12,354 44216110
Idaho Power Co. 56,300 1,710 45138010
LG&E Energy Corp. 13,400 543 50191710
NIPSCO Industries, Inc. 63,000 2,071 62914010
Philadelphia Electric Co. 67,300 2,036 71753710
Pinnacle West Capital Corp. (a) 79,900 1,788 72348410
Public Service Co. of Colorado 84,600 2,718 74444810
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
UTILITIES - CONTINUED
ELECTRIC UTILITY - CONTINUED
Southern Co. 179,400 $ 7,916 84258710
Texas Utilities Co. 162,900 7,045 88284810
97,708
GAS - 0.1%
British Gas PLC Ord. 400,000 2,021 11090199
Equitable Resources, Inc. 95,000 3,479 29454910
Southern Union Company (a) 112,160 2,972 84403010
8,472
TELEPHONE SERVICES - 0.7%
Ameritech Corp. 220,000 16,885 03095410
BCE, Inc. 80,000 2,792 05534B10
Bell Atlantic Corp. 200,000 11,800 07785310
LDDS Communications, Inc. (a) 20,000 965 50182L10
Southern New England Telecommunications Corp. 20,000 722 84348510
Southwestern Bell Corp. 55,000 2,283 84533310
Telefonos de Mexico SA sponsored ADR representing
shares Ord. Class L 105,000 7,087 87940378
42,534
TOTAL UTILITIES 195,765
TOTAL COMMON STOCKS
(Cost $4,586,266) 4,954,472
PREFERRED STOCKS - 0.8%
CONVERTIBLE PREFERRED STOCKS - 0.4%
CONSTRUCTION & REAL ESTATE - 0.1%
REAL ESTATE - 0.1%
Rouse Co. Series A 100,900 5,423 77927320
TRANSPORTATION - 0.3%
AIR TRANSPORTATION - 0.3%
UAL, Inc. 6 1/4% (f) 175,600 19,338 90254930
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONVERTIBLE PREFERRED STOCKS - CONTINUED
TRANSPORTATION - CONTINUED
TRUCKING & FREIGHT - 0.0%
Consolidated Freightways, Inc. Series C, $1.54 30,000 $ 664 20923720
TOTAL TRANSPORTATION 20,002
TOTAL CONVERTIBLE PREFERRED STOCKS 25,425
NONCONVERTIBLE PREFERRED STOCKS - 0.4%
UTILITIES - 0.4%
TELEPHONE SERVICES - 0.4%
SIP (Societa Ital Per L'Eser) Spa Di Risp N/C Ord. 5,657,200 10,299
78401796
Stet Societa Finanziaria Telefonica Spa 7,500,000 15,140 85982592
25,439
TOTAL PREFERRED STOCKS
(Cost $50,439 ) 50,864
CORPORATE BONDS - 0.8%
MOODY'S RATINGS PRINCIPAL
(UNAUDITED) (C) AMOUNT (000S)
CONVERTIBLE BONDS - 0.4%
DURABLES - 0.1%
TEXTILES & APPAREL - 0.1%
Unifi, Inc. 6%, 3/15/02 Baa1 $ 6,500 7,215 904677AC
HEALTH - 0.0%
MEDICAL FACILITIES MANAGEMENT - 0.0%
Abbey Healthcare Group, Inc. 6 1/2%,
12/1/02 (f) B2 290 409 002786AA
RETAIL & WHOLESALE - 0.2%
RETAIL & WHOLESALE, MISC - 0.2%
Fabri-Centers of America, Inc. 6 1/4%, 3/1/02 B2 7,300 6,497 302846AB
Intertan Inc. 9%, 8/30/00 - 5,270 4,226 461120AA
10,723
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) (C) AMOUNT (000S) (000S)
CONVERTIBLE BONDS - CONTINUED
TECHNOLOGY - 0.1%
COMMUNICATIONS EQUIPMENT - 0.1%
General Instrument Corp. 5%, 6/15/00 B1 $ 3,000 $ 4,020 370121AA
Porta Systems Corp. euro 6%, 7/1/02 - 130 96 7356479A
4,116
TOTAL CONVERTIBLE BONDS 22,463
NONCONVERTIBLE BONDS - 0.4%
FINANCE - 0.2%
BANKS - 0.2%
International Bank for Reconstruction &
Development euro 5 1/4%, 3/20/02 - 1,200,000 12,212 4590569J
MEDIA & LEISURE - 0.0%
BROADCASTING - 0.0%
Time Warner, Inc. 0%, 8/15/02 (d) Ba1 3,300 2,999 887315AG
RETAIL & WHOLESALE - 0.2%
GROCERY STORES - 0.2%
Rykoff Sexton, Inc. 8 7/8%, 11/1/03 Ba2 12,000 12,300 783759AC
TOTAL NONCONVERTIBLE BONDS 27,511
TOTAL CORPORATE BONDS
(Cost $47,798) 49,974
U.S. TREASURY OBLIGATIONS - 8.0%
U.S. Treasury Bills, yields at date of purchase
0%-3.13%, 2/24/94 (Cost $497,596) 500,000 497,720 99399H5H
OTHER SECURITIES - 0.1%
PURCHASED BANK DEBT - 0.1%
Macy (R.H.) & Co., Inc.: (b)
funded letter of credit 5/27/95 1,896 1,517
mortgage loan participation 5/27/94 2,500 1,988 556994BK
revolver loan variable rate 5/27/95 605 484 556994CH
OTHER SECURITIES - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (000S) (000S)
PURCHASED BANK DEBT - CONTINUED
Macy (R.H.) & Co., Inc. (b) - continued
special real estate capitalization 9/30/95 $ 287 $ 229 557991AA
term loan variable rate note:
5/27/95 799 639 556994CG
5/27/96 304 243 556993BD
5/27/96 728 583 556993BE
TOTAL OTHER SECURITIES
(Cost $4,859) 5,683
REPURCHASE AGREEMENTS - 11.0%
MATURITY
AMOUNT (000S)
Investments in repurchase agreements
(U.S. Treasury obligations), in a
joint trading account at 3.23%
dated 12/31/93 due 1/3/94 $ 684,233 684,049
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $5,871,007) $ 6,242,762
FORWARD FOREIGN CURRENCY CONTRACTS
AMOUNTS IN THOUSANDS SETTLEMENT UNREALIZED
DATE(S) VALUE GAIN/(LOSS)
CONTRACTS TO BUY
3,723,846 JPY
(Payable amount $34,829) 2/10/94 $ 33,344 $ (1,485)
THE VALUE OF CONTRACTS TO BUY AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 0.5%
CONTRACTS TO SELL
5,494,296 JPY
(Receivable amount $50,782) 2/10/94 $ 49,196 $ 1,586
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 0.8%
LEGEND
1. Non-income producing
2. Non-income producing - issuer filed for protection under the Federal
Bankruptcy Code or is in default of interest payment.
3. Standard & Poor's Corporation credit ratings are used in the absence
of a rating by Moody's Investors Service, Inc.
4. Debt obligation initially issued in zero coupon form which converts to
coupon form at a specified rate and date.
5. Affiliated company (see Note 6 of Notes to Financial Statements).
6. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $22,541,000 or .4% of net
assets.
7. Restricted securities - investment in securities not registered under
the Securities Act of 1933 (see Note 2 of Notes to Financial Statements).
Additional information on each holding is as follows:
ACQUISITION ACQUISITION
SECURITY DATE COST
Grand Palais
Enterprises, Inc. 6/11/93 $ 6,598,000
OTHER INFORMATION
Distribution of investments by country, as a percentage of total value of
investment in securities, is as follows:
United States 86.5%
Canada 6.3
United Kingdom 1.6
Others (individually less than 1%) 5.6
TOTAL 100.0%
INCOME TAX INFORMATION
At December 31, 1993 the aggregate cost of investment securities for income
tax purposes was $5,886,032,000. Net unrealized appreciation aggregated
$356,730,000, of which $462,590,000 related to appreciated investment
securities and $105,860,000 related to depreciated investment securities.
The fund hereby designates $68,130,000 as a capital gain dividend for the
purpose of the dividend paid deduction.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNTS) DECEMBER 31, 1993
ASSETS
Investment in securities, at value (including repurchase $ 6,242,762
agreements of $684,049) (cost $5,871,007) (Notes 1
and 2) - See accompanying schedule
Long foreign currency contracts held, at value (cost 33,344
$34,829) (Note 2)
Short foreign currency contracts (Note 2) $ (49,196)
Contracts held, at value
Receivable for contracts held 50,782 1,586
Cash 1
Receivable for investments sold 228,706
Receivable for fund shares sold 37,179
Dividends receivable 5,257
Interest receivable 752
Other receivables 173
TOTAL ASSETS 6,549,760
LIABILITIES
Payable for foreign currency contracts held (Note 2) 34,829
Payable for investments purchased 168,396
Payable for fund shares redeemed 40,915
Dividends payable 7,568
Accrued management fee 3,454
Other payables and accrued expenses 3,607
Collateral on securities loaned, at value (Note 5) 83,431
TOTAL LIABILITIES 342,200
NET ASSETS $ 6,207,560
Net Assets consist of (Note1):
Paid in capital $ 5,738,003
Distributions in excess of net investment income (174)
Accumulated undistributed net realized gain (loss) on 97,875
investments
Net unrealized appreciation (depreciation) on:
Investment securities 371,755
Foreign currency contracts 101
NET ASSETS, for 201,286 shares outstanding $ 6,207,560
NET ASSET VALUE and redemption price per share $30.84
($6,207,560 (divided by) 201,286 shares)
Maximum offering price per share (100/97.00 of $30.84) $31.79
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED DECEMBER 31, 1993
INVESTMENT INCOME $ 41,707
Dividends (including $167 from affiliated issuers) (Note
6)
Interest (including security lending fees of $62) (Note 5) 21,114
TOTAL INCOME 62,821
EXPENSES
Management fee (Note 4) $ 25,826
Basic fee
Performance adjustment 2,669
Transfer agent fees (Note 4) 12,923
Accounting fees and expenses (Note 4) 802
Non-interested trustees' compensation 25
Custodian fees and expenses 581
Registration fees 1,668
Audit 52
Legal 45
Miscellaneous 113
Total expenses before reductions 44,704
Expense reductions (Note 7) (954) 43,750
NET INVESTMENT INCOME 19,071
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
(NOTES 1 AND 3)
Net realized gain (loss) on:
Investment securities (including realized gain of $6,738 474,500
on sale of affiliated issuers)
Foreign currency contracts 6,113 480,613
Change in net unrealized appreciation (depreciation) on:
Investment securities 180,257
Foreign currency contracts 101 180,358
NET GAIN (LOSS) 660,971
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM $ 680,042
OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEARS ENDED DECEMBER 31,
1993 1992
INCREASE (DECREASE) IN NET ASSETS
Operations $ 19,071 $ 15,913
Net investment income
Net realized gain (loss) on investments 480,613 155,091
Change in net unrealized appreciation (depreciation) 180,358 42,217
on
investments
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 680,042 213,221
FROM
OPERATIONS
Distributions to shareholders: (19,956) (13,036)
From net investment income
In excess of net investment income (12,201) -
Net realized gain (387,128) (109,733)
TOTAL DISTRIBUTIONS (419,285) (122,769)
Share transactions 5,259,147 1,803,211
Net proceeds from sales of shares
Reinvestment of distributions from: 31,301 12,740
Net investment income
Net realized gain 379,054 108,001
Cost of shares redeemed (1,709,099) (1,028,207)
Net increase (decrease) in net assets resulting from 3,960,403 895,745
share
transactions
TOTAL INCREASE (DECREASE) IN NET ASSETS 4,221,160 986,197
NET ASSETS
Beginning of period 1,986,400 1,000,203
End of period (including under (over) distribution of $ 6,207,560 $ 1,986,400
net investment income of ($174) and $22,785,
respectively)
OTHER INFORMATION
Shares
Sold 170,736 67,906
Issued in reinvestment of distributions from: 1,036 468
Net investment income
Net realized gain 12,573 4,002
Redeemed (55,382) (39,126)
Net increase (decrease) 128,963 33,250
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED DECEMBER 31,
1993 1992# 1991 1990 1989
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 27.47 $ 25.60 $ 17.35 $ 16.78 $ 12.65
period
Income from Investment
Operations
Net investment income (.09) .32(dagger) .22 .51 .63(double dagger)
Net realized and unrealized 5.89 3.67 9.20 .15 4.82
gain (loss) on investments
Total from investment 5.80 3.99 9.42 .66 5.45
operations
Less Distributions
From net investment income (.11) (.20) (.11) (.09) (.25)
In excess of net investment (.07) - - - -
income
From net realized gain (2.25) (1.92) (1.06) - (1.07)
Total distributions (2.43) (2.12) (1.17) (.09) (1.32)
Net asset value, end of period $ 30.84 $ 27.47 $ 25.60 $ 17.35 $ 16.78
TOTAL RETURN * ** 21.43% 15.89% 54.92% 3.94% 43.15%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 6,208 $ 1,986 $ 1,000 $ 332 $ 298
(in millions)
Ratio of expenses to average 1.06% .87% .89% 1.06% .95%
net assets (diamond)
Ratio of expenses to average 1.08% .87% .89% 1.06% .95%
net assets before expense (diamond)
reductions
Ratio of net investment income .46% 1.19% 1.01% 3.02% 4.01%
to average net assets
Portfolio turnover rate 255% 297% 217% 320% 266%
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE.
** THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN.
# AS OF JANUARY 1, 1992 THE FUND DISCONTINUED THE USE OF EQUALIZATION
ACCOUNTING.
(dagger) NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
(double dagger) INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND
WHICH AMOUNTED TO $.20 PER SHARE.
(diamond) SEE NOTE 7 OF NOTES TO FINANCIAL STATEMENTS.
NOTES TO FINANCIAL STATEMENTS
For the period ended December 31, 1993
1. SIGNIFICANT ACCOUNTING
POLICIES.
Fidelity Contrafund (the fund) is registered under the Investment Company
Act of 1940, as amended (the 1940 Act), as an open-end management
investment company organized as a Massachusetts business trust and is
authorized to issue an unlimited number of shares. The following summarizes
the significant accounting policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are readily
available are valued at the last sale price, or if no sale price, at the
closing bid price. Securities (including restricted securities) for which
exchange quotations are not readily available (and in certain cases debt
securities which trade on an exchange), are valued primarily using
dealer-supplied valuations or at their fair value as determined in good
faith under consistently applied procedures under the general supervision
of the Board of Trustees. Short-term securities maturing within sixty days
are valued at amortized cost or original cost plus accrued interest, both
of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities, other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the current exchange rate. Purchases and sales of securities,
income receipts and expense payments are translated into U.S. dollars at
the exchange rate on the dates of the transactions.
It is not practical to identify the portion of each amount shown in the
fund's Statement of Operations under the caption "Realized and Unrealized
Gain (Loss) on Investments" that arises from changes in foreign currency
exchange rates. Investment income includes net realized and unrealized
currency gains and losses recognized between accrual and payment dates.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes all of its taxable income for its fiscal
year. The schedule of investments includes information regarding income
taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the ex-dividend date
may have passed, are recorded as soon as the fund is informed of the
ex-dividend date. Interest income is accrued as earned. Dividend and
interest income is recorded net of foreign taxes where recovery of such
taxes is not assured.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
market discount, partnerships, non-taxable
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
dividends and losses deferred due to wash sales, futures and options,
excise tax regulations. The fund also utilized earnings and profits
distributed to shareholders on redemption of shares as a part of the
dividends paid deduction for income tax purposes. Permanent book and tax
basis differences relating to shareholder distributions will result in
reclassifications to paid in capital.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS. Effective January
1, 1993, the fund adopted Statement of Position 93-2: Determination,
Disclosure, and Financial Statement Presentation of Income, Capital Gain,
and Return of Capital Distributions by Investment Companies. As a result,
the fund changed the classification of distributions to shareholders to
better disclose the differences between financial statement amounts and
distributions determined in accordance with income tax regulations.
Accordingly, amounts as of December 31, 1992 have been reclassified to
reflect an increase in paid in capital of $88,294,000 a decrease in
undistributed net investment income of $19,725,000 and a decrease in
accumulated net realized gain on investments of $68,569,000.
2. OPERATING POLICIES.
FORWARD FOREIGN CURRENCY CONTRACTS. The fund may enter into forward foreign
currency contracts. These contracts involve market risk in excess of the
amount reflected in the fund's Statement of Assets and Liabilities. The
face or contract amount in U.S. dollars reflects the total exposure the
fund has in that particular currency contract. The U.S. dollar value of
forward foreign currency contracts is determined using forward currency
exchange rates supplied by a quotation service. Losses may arise due to
changes in the value of the foreign currency or if the counterparty does
not perform under the contract.
Purchases and sales of forward foreign currency contracts having the same
settlement date and broker are offset and presented net on the Statement of
Assets and Liabilities. Gain (loss) on the purchase or sale of forward
foreign currency contracts having the same settlement date and broker is
recognized on the date of offset, otherwise gain (loss) is recognized on
settlement date.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. The fund's investment
adviser, Fidelity Management & Research Company (FMR), is responsible
for determining that the value of these underlying securities remains at
least equal to the resale price.
2. OPERATING POLICIES -
CONTINUED
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with other
registered investment companies having management contracts with FMR, may
transfer uninvested cash balances into a joint trading account. These
balances are invested in one or more repurchase agreements that are
collateralized by U.S. Treasury or Federal Agency obligations.
RESTRICTED SECURITIES. The fund is permitted to invest in privately placed
restricted securities. These securities may be resold in transactions
exempt from registration or to the public if the securities are registered.
Disposal of these securities may involve time-consuming negotiations and
expense, and prompt sale at an acceptable price may be difficult. At the
end of the period, restricted securities (excluding 144A issues) amounted
to $6,597,000 or .1% of net assets.
3. PURCHASES AND SALES OF
INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $12,208,779,000 and $9,289,698,000, respectively, of which U.S.
government and government agency obligations aggregated $262,056,000 and
$124,000,000, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
basic fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of the fund. The
group fee rate is the weighted average of a series of rates ranging from
.30% to .52% and is based on the monthly average net assets of all the
mutual funds advised by FMR. The annual individual fund fee rate is .30%.
The basic fee is subject to a performance adjustment (up to a maximum of +
or - .20%) based on the fund's investment performance as compared to the
appropriate index over a specified period of time. For the period, the
management fee was equivalent to an annual rate of .69% of average net
assets after the performance adjustment.
The Board of Trustees approved a new group fee rate schedule with rates
ranging from .2850% to .5200%. Effective November 1, 1993, FMR has
voluntarily agreed to implement this new group fee rate schedule as it
results in the same or a lower management fee.
SALES LOAD. For the period, Fidelity Distributors Corporation (FDC), an
affiliate of FMR and the general distributor of the fund, received sales
charges of $32,505,000 on sales of shares of the fund.
TRANSFER AGENT FEE. Fidelity Service Co. (FSC), an affiliate of FMR, is the
fund's transfer, dividend disbursing and shareholder servicing agent. FSC
receives fees based on the type, size,
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
TRANSFER AGENT FEE - CONTINUED
number of accounts and the number of transactions made by shareholders. FSC
pays for typesetting, printing and mailing of all shareholder reports,
except proxy statements.
ACCOUNTING AND SECURITY LENDING FEES. FSC maintains the fund's accounting
records and administers the security lending program. The security lending
fee is based on the number and duration of lending transactions. The
accounting fee is based on the level of average net assets for the month
plus out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $6,592,000 for the period.
5. SECURITY LENDING.
The fund loaned securities to certain brokers who paid the fund negotiated
lenders' fees. These fees are included in interest income. The fund
receives U.S. Treasury obligations and/or cash as collateral against the
loaned securities, in an amount at least equal to 102% of the market value
of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 100% of the market value of the loaned
securities during the period of the loan. At period end, the value of the
securities loaned and the value of collateral amounted to $79,295,000 and
$83,431,000, respectively.
6. TRANSACTIONS WITH
AFFILIATED COMPANIES.
An affiliated company is a company in which the fund has ownership of at
least 5% of the voting securities. TRANSACTIONS WITH COMPANIES WHICH ARE OR
WERE AFFILIATES ARE AS FOLLOWS:
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES
DOLLAR AMOUNTS IN THOUSANDS PURCHASES SALES DIVIDEND MARKET
COST COST INCOME VALUE
AFFILIATES
Action Industries, Inc. $ - $ 725 $ - $ -
Broadcasting Partners, Inc.
Class A (a) 3,016 - - 6,917
Brown Tom Inc. (a) 4,532 30 - 9,937
Cambrex Corp. 2,401 - 61 7,404
Centigram Communications Corp. 1,193 707 - -
Continental Homes Holdings Corp. 129 - 20 9,214
Control Data Systems, Inc. 1,016 1,297 - -
Donnkenny Inc. (a) 208 - - 6,624
Dovatron lnternational, Inc. 11,500 1,971 - 11,393
Electro Scientific Industries, Inc. 494 332 - -
Esco Electronics Corp. 619 - - -
Exide Electronics Group, Inc. 4,664 4,591 - -
Forstmann & Co, Inc. (a) 14 - - 3,236
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
DOLLAR AMOUNTS IN THOUSANDS PURCHASES SALES DIVIDEND MARKET
COST COST INCOME VALUE
AFFILIATES
Grad & Walker Energy Corp. $ 334 $ - $ - $ 6,016
Grand Palais Enterprises, Inc. - - - 6,598
Ground Round Restaurants, Inc. (a) 1,505 - - 5,947
HS Resources, Inc. (a) - - - 13,083
Haverty Furniture Companies, Inc. 1,667 - 65 9,081
Harmon Industries, Inc. (a) 705 813 - 3,462
Hyde Athletic Industries, Inc. 17 95 - -
Intensity Resources Ltd. (a) 6,376 5,529 - 2,020
Inter-Tel, Inc. (a) 2,399 - - 6,710
Just Toys, Inc. 1,348 1,484 - 4,530
Mb Communications, Inc. (a) 9,469 - - 21,773
Michael Anthony Jewelers, Inc. (a) - - - 4,188
Miltope Group, Inc. (a) 441 - - 1,587
Nantucket Industries, Inc. (a) 479 761 - 1,073
Natures Bounty, Inc. (a) 719 4,557 - 208
Ohm Corp. - - - 15,734
Offshore Pipelines, Inc. (a) 1,316 83 - 9,940
Orbit International Corp. - 7 - 1,416
Photonics Corp. (a) - 135 - 1,391
Porta Systems Corp. 779 - - 96
Redman Industries (a) 165 - - 7,628
Regal Communication Corp. (a) 3,795 - - 7,696
Rehabcare Corp. (a) 1,035 - - 2,554
Saga Communications, Inc.
Class A (a) 1,908 - - 5,614
Southwest Bancshares, Inc. - 586 - -
Syquest Technology, Inc. (a) 835 1,142 - 6,261
TETRA Technologies, Inc. 819 1,538 - 6,796
Vmark Software, Inc. (a) - 33 - 6,492
Warner Insurance Services, Inc. 2,098 2,937 21 2,205
Xylogics, Inc. (a) 1,946 1,032 - 1,155
Younkers, Inc. 5,202 1,473 - -
TOTALS $ 75,143 $ 31,858 $ 167 $ 215,979
(a) NON-INCOME PRODUCING
7. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a portion of
the fund's expenses. For the period, the
fund's expenses were reduced by $954,000 under this arrangement.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and the Shareholders of Fidelity Contrafund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Contrafund, including the schedule of portfolio investments, as of
December 31, 1993, and the related statement of operations for the year
then ended, the statement of changes in net assets for each of the two
years in the period then ended and the financial highlights for each of the
five years in the period then ended. These financial statements and
financial highlights are the responsibility of the fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of December 31, 1993 by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of
Fidelity Contrafund as of December 31, 1993, the results of its operations
for the year then ended, the changes in its net assets for each of the two
years in the period then ended, and the financial highlights for each of
the five years in the period then ended in conformity with generally
accepted accounting principles.
/s/COOPERS & LYBRAND
COOPERS & LYBRAND
Boston, Massachusetts
February 2, 1994
TO CALL FIDELITY
FOR FUND INFORMATION AND QUOTES
The Fidelity Telephone Connection offers you special automated telephone
services for quotes and balances. The services are easy to use,
confidential and quick. All you need is a Touch Tone telephone.
YOUR PERSONAL IDENTIFICATION NUMBER
(PIN)
The first time you call one of our automated telephone services, we'll ask
you
to set up your Personal Identification
Number (PIN). The PIN assures that
only you have automated telephone
access to your account information.
Please have your Customer Number
(T-account #) handy when you call --
you'll need it to establish your PIN. If
you would ever like to change your PIN, just choose the "Change your
Personal
Identification Number" option when
you call. If you forget your PIN, please
call a Fidelity representative at 1-800-
544-6666 for assistance.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND QUOTES*
1-800-544-8544
Just make a selection from this record-ed menu:
PRESS
For quotes on funds you own.
1.
For an individual fund quote.
2.
For the ten most frequently
requested Fidelity fund quotes.
3.
For quotes on Fidelity Select
Portfolios.(Registered trademark)
4.
To change your Personal
Identification Number (PIN).
5.
To speak with a Fidelity
representative.
6.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND ACCOUNT
BALANCES 1-800-544-7544
Just make a selection from this record-
ed menu:
PRESS
For balances on funds you own.
1.
For your most recent fund activity
(purchases, redemptions, and
dividends).
2.
To change your Personal
Identification Number (PIN).
3.
To speak with a Fidelity
representative.
4.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT IN
A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES. FOR MORE
INFORMATION ON ANY
FIDELITY FUND INCLUDING MANAGEMENT FEES AND CHARGES, CALL 1-800-544-8888
FOR A FREE
PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
851 Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19100 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
811 Wilshire Boulevard
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
1400 Civic Drive
Walnut Creek, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
185 Asylum Street
Hartford, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
2249 Galiano Street
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
4001 Tamiami Trail, North
Naples, FL
32 West Central Boulevard
Orlando, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
2000 66th Street, North
St. Petersburg, FL
GEORGIA
3525 Piedmont Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
HAWAII
700 Bishop Street
Honolulu, HI
ILLINOIS
215 East Erie Street
Chicago, IL
One North Franklin
Chicago, IL
540 Lake Cook Road
Deerfield, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
LOUISIANA
201 St. Charles Avenue
New Orleans, LA
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
1 West Pennsylvania Ave.
Towson, MD
7401 Wisconsin Avenue
Bethesda, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
21 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
101 Cambridge Street
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
26955 Northwestern Hwy.
Southfield, MI
MINNESOTA
38 South Sixth Street
Minneapolis, MN
MISSOURI
700 West 47th Street
Kansas City, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
60B South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
505 Millburn Avenue
Short Hills, NJ
NEW YORK
1050 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
10 Bank Street
White Plains, NY
NORTH CAROLINA
2200 West Main Street
Durham, NC
OHIO
600 Vine Street
Cincinnati, OH
1903 East Ninth Street
Cleveland, OH
28699 Chagrin Boulevard
Woodmere Village, OH
OREGON
121 S.W. Morrison Street
Portland, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
5100 Poplar Avenue
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
7001 Preston Road
Dallas, TX
1155 Dairy Ashford
Houston, TX
1010 Lamar Street
Houston, TX
2701 Drexel Drive
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
UTAH
175 East 400 South Street
Salt Lake City, UT
VERMONT
199 Main Street
Burlington, VT
VIRGINIA
8300 Boone Boulevard
Vienna, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
1001 Fourth Avenue
Seattle, WA
WASHINGTON, DC
1775 K Street, N.W.
Washington, DC
WISCONSIN
222 East Wisconsin Avenue
Milwaukee, WI
INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Will Danoff, Vice President
Gary L. French, Treasurer
John H. Costello, Assistant Treasurer
Arthur S. Loring, Secretary
Robert H. Morrison, Manager,
Security Transactions
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*
Phyllis Burke Davis*
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Edward H. Malone*
Marvin L. Mann *
Gerald C. McDonough*
Thomas R. Williams*
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
FIDELITY GROWTH FUNDS
Blue Chip Growth Fund
Capital Appreciation Fund
Contrafund
Disciplined Equity Fund
Dividend Growth Fund
Emerging Growth Fund
Fidelity Fifty Fund
Growth Company Fund
Low-Priced Stock Fund
Magellan(Registered trademark) Fund
New Millennium(REGISTERED TRADEMARK) Fund
OTC Portfolio
Retirement Growth Fund
Small Cap Stock Fund
Stock Selector
Trend Fund
Value Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
Exhibit 11
EXHIBIT 11
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference into the Statement of
Additional Information in Post-Effective Amendment No. 46 to the
Registration Statement on Form N-1A (the "Registration Statement") of
Fidelity Contrafund of our report dated February 2, 1994, relating to the
financial statements and financial highlights which is incorporated by
reference in said Statement of Additional Information.
We further consent to the references to our Firm in the Prospectus and
Statement of Additional Information under the headings "Financial
Highlights" and "Auditor".
/s/COOPERS & LYBRAND
COOPERS & LYBRAND
Boston, Massachusetts
February 11, 1994
